Market Timing is Easy in the Rear View Mirror

Market timing sounds smart...right up until you try to do it.

Here is why.  It requires two decisions that almost nobody can consistently get right.  Identifying the top and selling.  Recognizing the bottom and buying.  Impossible.

For 30 years I have heard versions of "we should have sold before the Middle East tensions escalated."  Funny enough, the same people said "We should have sold before the tariff headlines heated up."  And those were same people that said "we should have sold before the COVID crisis."  My crystal ball is broken.

But for fun, let's say you nailed it and sold in February before the latest wave of bad news.  Great.  But would you have had that same conviction to buy back in late march after the DOW logged it's fifth straight down week? When oil was pushing $110 a barrel?  This decision to buy back is where most market timers get stuck.

And for fun, let's say you made the right call.  Now what?  You need another perfect call.  And then another.  Why not one more?

As the Oracle of Omaha once said, "In the business world, the rearview mirror is always cleaner than the windshield."

Isn't that a fact.  Especially now.  The volatility isn't done for 2026.  Or any year.  The middle East will always drive headlines.  Election is coming up and that will also create a stir.  And let's not forget the latest Fed action.

There will always be a reason for concern (in the short term).  So instead of chasing headlines, stay anchored to your plan.  Remember that missing a handful of the best days can do a whole lot more harm than sitting through some of the scary ones.

For the period January 1, 2025, to December 31, 2025. The S&P 500 Composite Index is an unmanaged index that is considered representative of the overall U.S. stock market. The Dow Jones Industrial Average is an unmanaged index generally considered representative of large-capitalization companies on the U.S. stock market. Index performance is not indicative of the past performance of a particular investment. Past performance does not guarantee future results. Individuals cannot invest directly in an index. The return and principal value of stock prices will fluctuate as market conditions change. And shares, when sold, may be worth more or less than their original cost.

This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm.