Orders & execution
Time in the market
The idea that how long you stay invested matters more than when you choose to buy.
How it works
The phrase is shorthand for a real result: over long horizons, the variation in outcomes explained by staying invested dwarfs the variation explained by entry point.
This is a consequence of compounding. Each additional year multiplies everything that came before, and no entry price can substitute for a decade of that.
Where it misleads people
It is not an argument for holding anything indefinitely. It is an argument about market exposure in aggregate; individual companies can and do go to zero while the index compounds.
Related terms
- CompoundingEarning returns on the returns you already earned, so growth accelerates the longer you leave it alone.
- Market timingTrying to buy before rises and sell before falls, rather than staying invested throughout.
- DiversificationSpreading money across things that do not move together, so no single failure can decide your outcome.
- Time horizonHow long until you need the money — the single fact that should shape most of your other decisions.
More in Orders & execution
- Trailing stop
- Stop-limit order
- Day order
- Stop order
- Dollar-cost averaging
- Fill-or-kill
- Market order
- Fractional shares
All 12 Orders & execution terms · The full glossary, 433 terms
Educational reference only. Nothing here is investment advice or a recommendation to buy or sell anything, and tax treatment depends on your own circumstances and the country you are in.