You've Heard It Before, But This Investment Advice Still Pays Off
"Time in the market beats timing the market" ¬— been there, done that, right? But don't write off the underlying advice. There's a reason it's a popular saying.
There's a saying in investing circles that's been passed down like Grandma's best recipe: "Time in the market beats timing the market." And as tired as that line may sound, it's stood the test of time for a reason.
The truth is, trying to guess what the market will do next is a fool's errand. No one — no matter how many books they've written or how many CNBC appearances they've logged — has consistently and accurately timed the market over the long haul.
But even though we know this, plenty of investors still try to outguess the system.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Here's the catch: The real winners in investing aren't the folks trying to call the next dip or peak. They're the ones who stay in, ride out the storms and give their money time to grow.
Why timing doesn't work
I'll be honest — this concept couldn't be more straightforward. You, me, Warren Buffett — we're all flying blind when it comes to predicting when the next selloff will hit. And no, the market hitting an all-time high doesn't automatically mean a crash is coming.
There are just too many variables: Economic reports, elections, international tensions, new technology, you name it. Markets are driven by millions of moving parts, and sometimes no one sees what's coming.
A 20-year reality check
Let's put this in perspective. Back in 2003, the S&P 500 was sitting at about 1,200. Fast-forward 20 years. We've lived through the 2008 financial crisis, Brexit, flash crashes, geopolitical tensions, COVID-19 and enough political drama to last a lifetime. Yet today, the S&P 500 is flirting with 6,800—about 5.6 times higher than it was two decades ago.
Had you jumped in and out of the market trying to dodge those events, you would've needed a crystal ball — not just to know what was coming, but exactly when and how the market would respond. Oh, and when to jump back in.
The better move? Stay put. Ignore the noise. Let time do its thing. In this case, that "do nothing" strategy could have earned you a return north of 560%. Not bad for being patient.
So, what's the plan?
Ask yourself this: If a friend came to you for investing advice, would you tell them to rely on gut feelings and headlines? Or would you encourage them to build a solid portfolio and let it ride through the ups and downs?
Chances are, you'd go with the second option. Yet when it comes to our own money, we often ignore our own good advice. Why?
Blame your brain. Our fight-or-flight instincts helped our ancestors dodge saber-tooth tigers, but they're not so great at handling market volatility. When fear kicks in, logic tends to leave the room.
The winning formula
So, what's the formula for success? For starters, get help. Most of us aren't wired to make calm, rational decisions with our own money, especially during turbulent times. That's where a good financial adviser comes in.
Next, be mindful of the media you consume. Financial news is more about eyeballs than education. The headlines are designed to spark emotion, not provide balanced insight.
And finally, play the long game. Real wealth-building isn't about fast money or flashy trades. It's about consistency, patience and a little faith in the process.
At the end of the day, it's not about being perfect — it's about being present. So stick with it. Your future self will thank you.
Stay wealthy, healthy and happy.
Related Content
- A Simple Trick for Better Investing: Stop Timing the Market
- 5 Popular Investing Strategies You Should Really Rethink
- To Beat Inflation and Build Wealth, This Is the Strategy You Need
- Before the Next Time Markets Sink, Do Your Lifeboat Drills
- Winning Investment Strategy: Be the Tortoise AND the Hare
-
How Advisers Can Respond When Clients Ask About Crypto in 401(k)sAdvisers need to establish clear frameworks to address client interest, navigate risks like volatility, and ensure they meet their fiduciary responsibilities.
-
3 Niche Oil and Gas Investments for Next-Gen Wealth BuildersLesser-known segments of the oil and gas sector present unique opportunities for next-gen investors and family offices, as long as they're vetted thoroughly.
-
How to save for college and retirement at the same timeSponsored Consider these steps to balance two of life’s most significant financial goals.
-
Are Clients Asking About Adding Crypto to Their Retirement Plans? This Is How Advisers Can Approach This New 401(k) Frontier
Advisers need to establish clear frameworks to address client interest, navigate risks like volatility, and ensure they meet their fiduciary responsibilities.
-
3 Niche Oil and Gas Investments for Next-Gen Wealth Builders
Lesser-known segments of the oil and gas sector present unique opportunities for next-gen investors and family offices, as long as they're vetted thoroughly.
-
6 Champagne Problems Successful Retirees FaceWhat do you do if your biggest financial threat is simply having too much of a good thing — money?
-
A Portfolio Checklist If You're Planning to Retire in 2027Are you planning on retiring in 2027? This portfolio checklist will help put you on the right path.
-
How to Avoid Being Buried by the Tax Avalanche in Retirement: Tips From a Wealth AdviserAll that cash you have in tax-deferred accounts could launch you into a higher tax bracket when you start withdrawals. It's time to protect your income.
-
I'm a Financial Adviser: This Is the Real Secret to Retirement SuccessFor real retirement security, forget about chasing returns and focus instead on the things you can control: income, taxes, risk-taking and decision-making.
-
Is Your Retirement Plan Based on Social Security Fact or Fiction?One in two Americans don't know much about Social Security — and some are basing their retirement on mistaken beliefs. It's time to separate fact from fiction.
-
Are You Investing to Score Points or Make Money? Cautionary Tales From an Investment AdviserHave you become numb to risk? Is your brokerage app or website fueling your desire to trade? An investment adviser explains why it always pays to be cautious.
