If you’ve found yourself staring at your investment portfolio lately with a sense of unease, you’re far from alone. With ongoing volatility across global markets, heightened geopolitical tension, renewed tariff battles, government fiscal issues, and the ever-evolving stance of central banks on interest rates, it feels like uncertainty has become the norm.

And in that uncertainty, a very human impulse kicks in—the desire to act. Maybe you're thinking, Should I just step aside for now? Sit in cash until things feel more stable?

It’s a perfectly reasonable question. But let’s pause before taking that leap. Because if history and data teach us anything, it’s this: acting on that impulse rarely ends well.

A Familiar Pattern in Unfamiliar Clothing

Each market downturn has its own unique flavor. The dot-com crash of the early 2000s came after irrational exuberance in internet companies. The 2008 financial crisis was driven by a housing bubble and the collapse of major financial institutions. In 2020, the COVID-19 pandemic sparked a sudden, sharp drop—34% in just over a month—as global economies ground to a halt. Then in 2022, markets slid again under the weight of historic inflation, rising interest rates, and supply chain disruptions.

Different causes, yes. But the same result: fear-induced selling. Investors questioned whether “this time is different,” whether markets would ever recover, and whether they should pull out and wait.

And every time, markets did recover—often faster and more powerfully than expected.

Consider this: the S&P 500 has delivered an average annual return of about 10% since 1926, even accounting for all these crises. Investors who stayed the course were rewarded not for predicting the future, but for not reacting to it.

The Myth of Market Timing

Still, the logic of timing the market is tempting: get out before the worst, get back in once things look better. It sounds prudent. But in practice, it’s nearly impossible to execute. Because the “right” moment to re-enter is never obvious until long after it's passed.

Study after study confirms this. Research from J.P. Morgan found that between 2003 and 2022, the S&P 500’s annualized return was 9.8%. But investors who missed just the 10 best days—days often surrounded by extreme volatility—saw their return drop to 5.6%. Miss the 20 best days, and the return drops further to 2.9%. Miss 30, and you were underwater.

Crucially, six of the 10 best days occurred within two weeks of the 10 worst days. That means, if you're sitting on the sidelines after a steep decline, you’re very likely to miss the recovery. The rebounds don’t wait for a green light—they just happen.

Morningstar echoes this reality. In a 2023 analysis of investor behavior, they found that timing decisions cost the average investor 1.7% in annual returns, simply from poor fund flow timing—buying high and selling low.

Even institutional investors don’t get it right. A study published in the Journal of Financial Economics tracked pension funds over 20 years and found that their attempts to time markets detracted from performance more often than not. Another comprehensive analysis by CXO Advisory, which tracked market predictions from over 60 investment “gurus,” revealed that even seasoned experts were accurate only about 47% of the time—less than a coin toss.

Why Doesn’t It Work?

The idea that we can outsmart the market hinges on a faulty assumption: that we know something others don’t. But in a world of high-speed algorithms, real-time news cycles, and deep liquidity, markets are remarkably efficient. Prices generally reflect all known information, making it nearly impossible to consistently gain an edge.

This efficiency is why some investors turn to valuation metrics like the CAPE (cyclically adjusted price-to-earnings) ratio. While CAPE can help identify periods when markets are broadly expensive or cheap compared to historical norms, it’s not a practical tool for timing. Markets can stay “overvalued” or “undervalued” for years, even decades. Valuation tells us nothing about when the market will rise or fall—it only gives context.

What Should We Do Instead?

Rather than trying to predict the unpredictable, the better path lies in preparation and consistency. One of the most overlooked tools in investing isn’t a formula—it’s self-awareness.

If market swings are keeping you up at night or tempting you to abandon your long-term plan, that’s not a signal to jump ship—it’s a cue to re-evaluate your risk tolerance. Perhaps your portfolio is taking on more risk than you're comfortable with. Adjusting your asset allocation to better reflect your capacity for volatility can help you stay invested during both the storms and the sunshine.

And staying invested is key. A globally diversified portfolio of low-cost index funds has consistently outperformed the vast majority of active managers over time—not because it's flashy, but because it's disciplined. It removes the emotion, eliminates the guesswork, and avoids the friction costs (and tax consequences) of jumping in and out.

For me, this approach brings peace of mind. I like to stay informed about global events—not to try to outmaneuver the market, but because I believe understanding facts about global events helps me plan and make better decisions for my family, and that being an informed citizen is just the right thing to do. It isn’t necessarily what the financial media wants you to hear, but from an investing perspective, I believe the day-to-day, 24/7 news and financial media built around “getting an edge” in the markets and fear-inducing headlines should never form a basis for your long-term investment decisions.

Conclusion: The Best Move Is Often No Move at All

The question of whether it ever makes sense to time the market is understandable, especially during moments like these. But the overwhelming body of evidence tells us that while the idea sounds good in theory, it fails in practice—over and over again.

Instead, the winning strategy is deceptively simple: know yourself, set a strategy, stick with it, and ride out the noise. Markets are unpredictable, but your behavior doesn’t have to be.