Invest for the long term
Investing over a long time horizon brings many benefits:
Lower volatility
Most absolute benefits of compound investing come in later years
Higher tax efficiency if invested in appropriate vehicles (UK ISA, US 401k, etc.)
Asset price driven by “value” not “perceived value”
Many opportunities overlooked
Lower transaction fees (because it requires less active management)
More asset classes available
It also comes with unique drawbacks:
Requires nerves of steel
Lower liquidity
Lower feedback loops
Require more data, reasoning to support decisions
To quote Sam Altman:
One of the few arbitrage opportunities left in the market is time. I think we have gotten really good at High-Frequency Trading, we have gotten really good at [measuring] the price of things. We have gotten worse at [measuring] the long-term value. I don't think you can go and beat the market in a lot of ways. But the one way I do is by making a long-term commitment to something. My new belief for how long I should hold stock in the best companies I invest in is forever. In a world that is increasingly focused on the tick and the quarterly revenue cycle, you should go the opposite way.
References
Sam Altman: How to Build the Future
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