There are many approaches to investing in stocks: day trading, value investing, growth investing, index investing, dividend strategies, and more. In the spirit of diversification, your portfolio might contain elements of several. But regardless of your investing style, one strategy consistently proves risky: trying to time the market.
If you’re holding a portfolio of stocks you believe in for the long term, do not try to time the market. Too many people panic, sell their positions, and hope to buy back in at a lower price. History shows that this strategy often backfires—and can cost you dearly in the long run.
Instead of trying to predict every market movement, many investors focus on long‑term strategies such as diversification and dollar cost averaging.
Why It’s So Hard to Time the Market
Trying to time the market sounds simple in theory. The idea is to sell before prices fall and buy back in before they rise again.
In reality, it’s extremely difficult.
Markets move quickly and are influenced by news, economic data, interest rates, geopolitical events, and investor sentiment. Even professional investors rarely succeed at timing the market consistently over long periods.
More importantly, some of the market’s best days often occur during periods of extreme volatility. If you sell during a downturn and wait too long to re-enter, you may miss the rebound entirely.
The 2020 Roller Coaster
Let’s revisit a clear example: the 2020 pandemic.
The year started strong. As of February 19, 2020, the NASDAQ Composite—an index heavily focused on technology—was up 9.41%. But then COVID took hold.
In March 2020, lockdowns, fear, and uncertainty spread rapidly. Businesses shut down. Daily life paused. And the stock market plunged.
By March 16, the NASDAQ was down 23.05%, wiping out the year’s gains and more.
At that moment, it felt like everything might collapse. I personally was on the edge of panic. I had intense conversations with my broker about selling everything. Thankfully, I was talked off the ledge—and I held on.
By the end of 2020, the NASDAQ finished the year up 43.64%.
Let’s break that down:
• If you had $100,000 invested in a NASDAQ ETF like QQQ at the start of 2020 and sold on March 16, you would have locked in a $23,000 loss.
• If you had held your investment through year-end, you would have gained $43,000.
• That’s a $66,000 difference—all based on one decision: whether to stay invested or jump out.
Timing the Market Means Risking the Best Days
The point here isn’t just to avoid panic.
It’s to understand that some of the market’s best days often follow its worst. If you’re out of the market during just a few of those key upswings, it can have a massive long-term impact.
Let’s look at some broader data in the following charts:
If you had invested $1,000 in the S&P 500 in 1970 and left it untouched through 2019, your money would have grown to $138,908.
But if you missed just the single best market day during that 49‑year period, your investment would have been about $14,000 lower.
Missing more of the top-performing days reduces returns dramatically. And it’s not just the money lost on those days—it’s the compounding effect you miss over decades.
Another example, from a CNBC article dated April 7, 2025, Selling out during the market’s worst days can hurt you, research shows — here’s how much you could lose:
- A $10,000 investment in the S&P 500 held from 2003 to 2022 would have grown to $71,750.
- Miss the 10 best days, and the value drops to $32,871.
- Miss the 30 best days, and the investment shrinks to $12,948.
Trying to time the market often means missing those critical days.
Final Thoughts
Uncertainty will always be part of investing. Markets rise and fall, sometimes dramatically.
But history has shown that investors who stay the course tend to be rewarded over time.
Trying to time the market—jumping in and out based on fear or speculation—often means missing the very days that make the biggest difference.
None of us can predict the future.
But if the past is any guide, staying invested is usually the smarter move.
