Most people see stock investing as the following process:
Companies give us the opportunity to buy into their growth. This opportunity for compounding and exponential growth is a cheat code for generational wealth. We're lucky that the market is offering us the chance to buy in and get ahead in life. Buying $1000 of stocks right now is a seed of ownership that will grow over time.
What stock investing actually is:
When you buy $1000 of stocks, your balance is actually negative. It’s -1000, not 1000. The number on your screen says those stocks are worth $1000, but you’re down $1000 of real, actualized money that you just paid to someone. That someone decided that that $1000 was more valuable than the stocks they just sold to you.
But how can this be? Everyone knows how compounding works. Everyone knows how inflation and money printing works. So why would anybody sell stocks (compounding growth) to YOU for cash (fiat inflating currency)? Are you special? Are they stupid?
Isn’t cash drag, time in the market, miss the 10 best days, hold and never sell, known to everybody, including the smartest and richest economists, financiers and mathematicians on earth? Out of the trillions of capital they control, they just decided out of the benevolence of their conscience to sell YOU the opportunity of exponential growth and generational wealth, when they themselves are capable of managing, protecting and deploying those assets far better than you ever will be?
How could selling “compounding exponential growth assets” to you for unproductive and inflating fiat currency, which "cash drags" and has "opportunity cost", ever be the correct decision?
Your ownership of stocks is a claim on a stock whose value comes only from the market price of that stock. You do not own money, value, capital or wealth. You own a claim. When you own stock worth $1000 that you just paid $1000 for, the actual "money" you currently own is between a range of -1000 and 0.
When your stocks you bravely held through 2009 dropped 60% (can't miss those 10 best days in the market! Hold hold hold!) took until 2016 to return to their 2009 levels, you DID experience "cash drag" and "opportunity cost".
Just remember to keep in mind, you are not special, nobody wants to make you rich, and for every transaction there's a buyer and a seller, and if that transaction is money for stock, somebody (who has access to information and expertise you do not have) values your inflating cash dragging time-out-of-the-market monopoly bucks more than that share of stock.
Remember - to get value from your stocks - actual value, wealth, money, capital, not a theoretical claim - they will eventually be sold. The timing of that sell is critical.