One of my favorite movie themes is time travel.
Avengers going back in time to steal the infinity stones (spoiler alert).
Harry Potter going back in time to save Sirius Black (spoiler alert).
Terminator going back in time to save John Connor (spoiler alert).
These movies have been out for years, so I won’t apologize for those spoilers.
Anyway, these movies remind me that WE CAN’T GO BACK IN TIME AND WE CAN’T PREDICT THE FUTURE.
So we are we trying to time the markets? We don’t know what’s going to happen in the short term and we can’t go back in time to catch market bottoms.
BUT we ABSOLUTELY know what’s going to happen in the long term.
Danger
One of the most dangerous mistakes new investors make is trying to time the market — jumping in when things feel good and pulling out when they don’t.
On paper, it sounds simple: buy low, sell high. In practice, it usually works the other way around.
DALBAR’s long-term investor study found the average equity investor lagged the S&P 500 by over 5% annually because of poor timing decisions.
In 2024 alone, that gap was still 8.5%!!! Investors sold during downturns, missed the rebound, and locked in losses.
Double danger
Here’s the kicker: the market’s best days almost always cluster around its worst ones. Research shows 78% of the S&P 500’s best days happened during a bear market or just after one.
If you sat out to “wait for clarity,” you likely missed those huge upswings. Missing just the 10 best days in the last 30 years would have cut your total return in half. Missing the 30 best days slashed returns by more than 80%.
The smart move
On the flip side, simply staying invested pays off. Since World War II, every single 10-year rolling period for the S&P 500 has ended positive.
Bull markets have historically lasted about 2.7 years with +112% gains, while bear markets averaged less than 10 months with -35% declines.
Time in the market lets you capture those recoveries, and the compounding effect that turns patience into wealth.
With a trend this solid and consistent, why even bother trying to time the markets? Especially if you’re investing for the long-term.
Fight back
So how do you avoid the timing trap?
Build a plan you can stick with. Choose an allocation that matches your risk tolerance so you’re not tempted to bail.
Automate your investing. Dollar-cost averaging ensures you keep buying through the ups and downs.
Separate short-term needs. Keep an emergency fund so you’re never forced to sell investments at the wrong time.
Tune out the noise. Daily headlines don’t matter nearly as much as staying invested for decades.
MORE PROOF
Charles Schwab once ran a thought experiment: the “perfect market timer” did the best, but right behind them was the investor who simply invested immediately and never looked back.
Even the “worst market timer,” who bought at the top every year, still beat sitting in cash.
Time-in over timing
So until Elon Musk builds a time machine, I get my letter to Hogwarts, or we start fighting AI through the decades, time travel isn’t possible.
Don’t waste energy chasing perfect timing. Put time on your side. Stay invested, stay disciplined, and let compounding do the heavy lifting.
