We’ve all heard the phrase “buy low, sell high.” But here’s the real question; is it actually possible to time the market that well?
It sounds simple, but the truth is that trying to predict the best time to buy or sell often ends up hurting investors more than helping them. So what’s the smarter move?
It might be exploring long-term strategies like how to buy ETFs, which help you build consistent exposure without chasing perfect entry points.
It is time to explore why market timing is so risky and walk through 3 better strategies that can help you grow your money with more confidence.
Why Do So Many Investors Try to Time the Market?
It’s natural to want to “buy at the bottom” and “sell at the top.” The idea of timing the market can feel like a shortcut to success. But here’s the problem: the market doesn’t follow a predictable pattern.
Even professional investors struggle to get it right consistently. According to a report from S&P Dow Jones Indices, the majority of actively managed U.S. stock funds failed to beat the S&P 500 index over a 15-year period ending in 2024.
That means even with resources, experience, and research, many fund managers couldn’t outperform simply staying invested in the broader market.
What Happens When You Try to Time the Market?
Let’s look at real data.
A recent study comparing five types of investors. Each investor added $2,000 to the market every year for 20 years, using a different approach:
- Perfect market timer (invests at the lowest point each year): $151,391
- Invests immediately each year (no timing): $135,471
- Uses dollar-cost averaging (spreads investment across the year): $134,856
- Invests at market peaks (worst timing): $121,171
- Keeps money in cash (no investment): $44,438
So what does this show? Even if you never get the timing right, you’re still better off investing something rather than waiting or trying to guess. And the second-best performer was someone who didn’t even try to time the market — they just invested regularly.
What Are Smarter Strategies You Can Use Instead?
If timing the market isn’t the answer, what is? Here are three proven strategies that could offer better long-term results.
1. Is Building a Diversified Portfolio a Safer Bet?
Yes. Spreading your investments across different asset types (like stocks, bonds, real estate, and cash) can help reduce risk. Why? Because these assets don’t always move in the same direction at the same time.
When one market is down, another might be stable or growing. Diversifying allows your portfolio to stay balanced and avoid big swings based on one investment.
So, instead of betting everything on one type of asset, you spread your risk and give yourself more chances to grow.
2. Could Dollar-Cost Averaging Help You Stay Consistent?
What if you’re nervous about putting a large amount of money into the market all at once?
That’s where dollar-cost averaging comes in. This strategy involves investing smaller amounts at regular intervals, say monthly or with each paycheck, regardless of where the market stands.
It removes the pressure of guessing the “right” time. Over time, you buy at both highs and lows, which averages out your purchase price. While this approach may not always beat lump-sum investing in bull markets, it helps reduce emotional decision-making and supports long-term discipline.
3. Should You Focus on Long-Term Investing Instead?
If the market moves up and down all the time, does it really make sense to stay in for the long haul?
Actually, yes. History shows that while markets are unpredictable in the short term, they tend to rise over the long term. Even after major drops, markets often recover — and then hit new highs.
By staying invested through market ups and downs, you give your money time to grow. And consistent investing — regardless of news headlines — is often one of the most effective ways to build wealth.
So, What’s the Best Move for Most Investors?
The honest answer? Most people are better off not trying to time the market. Instead, building a diversified portfolio, investing consistently, and focusing on long-term growth tends to produce better results.
Yes, the markets will always have ups and downs. But history favors those who stay the course, not those who try to predict the future.
Final Thoughts
It’s tempting to believe that timing the market is the key to making money — but evidence shows otherwise. Even if you’re not perfect, consistent investing wins more often than trying to guess the highs and lows.
So ask yourself: Would you rather gamble on market timing or follow a plan that has stood the test of time?
Remember, in investing — it’s not about timing the market. It’s about time in the market.