Investing · Module 5 of 11
The days you cannot pick
Why staying invested usually beats trying to time the market, and why the latest news is a poor guide.
Key terms in The days you cannot pick
- Market timing
Market timing is an active strategy of moving money in and out of the market, or between investments, to profit from expected short-term price changes. Practitioners rely on technical, quantitative, or fundamental analysis. Regulators point out that it brings extra trading costs and tax consequences, and that being out of the market during a rebound can mean missing recovery.
Source: FINRA, What Is Market Timing?
- Buy-and-hold strategy
A buy-and-hold strategy is an approach in which an investor keeps investments for a long period instead of trading in response to price movements. It is the usual benchmark against which market timing is compared. Holding generally involves fewer transactions, so it tends to generate lower trading costs and fewer taxable events.
Source: FINRA, What Is Market Timing?
- Market risk
Market risk is the possibility that an investment's value rises or falls because of conditions in the broader market rather than anything specific to the holding. It is one of several named categories of investment risk, alongside business, political, liquidity, and inflation risk. Diversifying across holdings does not remove it entirely.
Source: FINRA, Risk
Every term on Lever is in the money glossary.
About this module
The days you cannot pick is part of Investing, one of 15 subjects in Lever. It’s a short run of 5 lessons, about 13 minutes in all, so you can finish it in one sitting.
Every lesson takes one idea at a time. You read it with the math worked out step by step, answer a question that puts it to use, then see why the right answer is right and why the others aren’t.
It’s for anyone who was never taught this, and you don’t need to know anything first. Every lesson is free. Lever works out what you already know, so you can start here or let your path bring you to it.
More in Investing
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1
Why money cannot sit still
Why cash slowly loses value, what it means to put money to work, and which money shouldn’t be invested at all.
7 lessons -
2
What risk actually is
What risk really means, why higher returns come with bigger swings, and how much ups and downs you can live with.
9 lessons -
3
What you can actually own
Stocks, bonds, funds and index funds explained, plus the yearly fee that never sends you a bill.
10 lessons -
4
Actually starting
Open the account, start small, invest a set amount on a schedule, and keep an eye on fees.
7 lessons -
6
The account with a tax break
Retirement accounts with tax breaks, free money from an employer match, and paying tax now or later.
5 lessons -
7
Limits, locks and deadlines
How much you can put into tax-advantaged accounts, the cost of taking money out early, and the deadlines to know.
6 lessons -
8
Moving it and naming it
What happens to your retirement account when you change jobs, and accounts meant for one specific purpose.
5 lessons -
9
Spending what you saved
How much you can take out each year in retirement without running out, and why the order of good and bad years matters.
5 lessons -
10
The mix that shifts
Choosing your mix of investments, rebalancing when it drifts, and all-in-one funds that do it for you.
7 lessons -
11
Choosing where it goes
Which account to fill first, which investments to keep where, and how to do it all if you work for yourself.
6 lessons
Try this module
It’s part of Investing. Lever will bring it to you when you’re ready, or you can go straight there.