Every day we hear about the market. It is in the news and on the TV. But what is the market? Often times it is viewed as a casino or a rollercoaster; irrational and subject to chance. If an investor has poor returns, it is just bad luck. This is a misconception because if it is used effectively, it can be a central part of your long-term investment strategy and retirement plan.
The market is actually a price discovery machine. It values companies based on how investors digest all available information. The price of a stock can increase or decrease as news is released that affects the perceived value of a company. While some investors may try to time the market, it has been proven to be a difficult approach. For the vast majority of investors a long-term approach is the most efficient. To learn more about the market, feel free to watch the educational video produced by Dimensional Fund Advisors.