Timing Schmiming

Over the last few months, we have seen military strikes, oil shocks, and a market that dropped nearly 8% and then sprinted back to all-time highs in the span of a few weeks. It seems like a good time to revisit a topic that never really goes out of style…market timing.

Timing…we’d all like to get it perfectly right, particularly when it comes to investing. Wouldn’t it be great if we knew exactly when the high was in so we could sell before the fall? What about knowing when the low was in so we could buy with confidence?

What if we told you that while timing things perfectly is certainly desirable, it is not necessary? In fact, what if we told you that trying to time things perfectly may actually leave you in a worse position than simply acting?

Before you crumple this up and throw it away (a nod to those who actually print these before reading) - or simply press delete - let us explain.

Logic vs. Emotion - The Eternal Investor Battle

Rather than acting purely on logic, people tend to act on their emotions - particularly fear and greed. The fear part is what makes them sell at the bottom. The greed part is what makes them buy at the top. To be honest, they are both sides of the same “fear” coin. On one side: the fear of loss. On the other: the fear of missing out.

The Worst Timing Imaginable - And It Still Worked Out

Let’s go back to 2007, right before the Great Recession.

In October 2007, the S&P 500 hit its high of 1,576 and the Nasdaq hit its high of 2,862. As of April 30, 2026, the S&P 500 closed at 7,209 and the Nasdaq closed at 24,892. The investor with the absolute worst timing — the one who bought at the very top in 2007, right before one of the worst financial crises in modern history — has still made more than 4.5x on the S&P 500 and more than 8.5x on the Nasdaq over 18.5 years. Most people would be overjoyed with those results.

Now, let’s look at what happened in between. About a year and a half after those 2007 highs, in March 2009, both indexes hit their lows - 667 for the S&P 500 and 1,300 for the Nasdaq. The loss was greater than 50% for both, and it was a turbulent ride all the way down. The fear of loss caused many investors to lock in those losses, fully intending to reenter the market when things “got better.”

The problem? “Better” arrived fast – too fast for most. The S&P 500 rose approximately 30% between March and May of 2009 alone and continued higher from there. Many investors who sold near the bottom did not get back in until the recovery was well underway — often at prices higher than where they originally sold. Fear of loss caused them to sell low. Fear of missing out (eventually) caused them to buy high. Rinse and repeat.

These are the investors for whom the market “just doesn’t work.”

We May Be Living in Another Perfect Example

In late February and through March, the S&P 500 fell nearly 8% from its highs. Military conflict in the Middle East. Oil prices surging. Market volatility jumping from “all clear” to “pay attention” almost overnight. For investors prone to emotional decisions, the case to sell felt overwhelming: war, inflation risk, an uncertain Fed, and a market that was visibly cracking.

Then April happened.

The S&P 500 rallied from its March lows back to approximately 7,209 by April 30 and even higher in May - recovering everything and then some. Investors who sold in a panic to “wait for things to get better” have found themselves watching the recovery from the sidelines, trying to decide when it is safe to get back in. (Spoiler: it never feels safe.) The fear of loss caused them to sell low. The fear of missing out will eventually cause them to buy back in - likely at higher prices. The cycle repeats.

This movie has been playing for decades and will continue to play for decades more.

The Lottery Ticket Problem

The idea of perfect market timing is certainly enticing. But much like winning the lottery, the ability to do so consistently is virtually impossible for the vast majority of investors. Yes, some people have timed the market correctly on occasion – and some people have also won the lottery. Repeating either feat is a different story entirely.

When the worst buy-and-hold scenario in recent history - buying at the absolute top in 2007, absorbing a 50%+ loss, and simply holding - still resulted in growing your money more than 4.5x, is that really so bad?

A Note on What This Means for Your Portfolio

For the long-term portion of your portfolio, our approach is specifically designed around this reality. Broad diversification, systematic rebalancing, and a disciplined process for buying when things are attractively valued and trimming when they are not - all of it is designed to remove the emotional decision-making that causes investors to buy high and sell low.

One important distinction worth making - the type of volatility we saw in 2007 and again earlier this year is exactly why we advise you to keep funds you know you’ll need in the near- or mid-term in safer (or, more boring) investments than the stock market, particularly when you “just know” it will keep going up.

What Matters

The market does not reward perfect timing - it rewards patience. The investor from 2007 did not need to get it right. That investor just needed to invest and wait. That is worth remembering the next time the headlines (or your emotions) make staying feel difficult or the next time you fret about whether or not it is the perfect time to invest.

We are here to help provide perspective and guidance exactly when those emotional moments arise. As always, please don’t hesitate to reach out with questions, updates to your situation, or simply to talk things through.

Summer is right around the corner, which seems like a wonderful time to take a deep breath and focus on the things that truly matter - time with the people you care about and doing the things that bring you joy.

Have a wonderful month and Happy Father’s Day to all the dads out there!