You've Heard It Before, But This Investment Advice Still Pays Off

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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.

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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.

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The author of this article is a participant in Kiplinger's Adviser Intel program, a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

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.

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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In March 2010, Andrew Rosen joined Diversified, bringing with him nine years of financial industry experience. As a financial planner, Andrew forges lifelong relationships with clients, coaching them through all stages of life. He has obtained his Series 6, 7 and 63, along with property/casualty and health/life insurance licenses. Andrew consistently delivers high-level, concierge service to all clients.