A common mistake investors make is to sit on the sidelines until they’ve deemed it “safe.” Unfortunately, a market’s potential isn’t always clear until much of the gains have already been made. Thus, by waiting for the perfect moment to invest, those who hesitate can miss out.
That’s why we encourage people to view investing as a lifelong journey in which steady progress is more important than perfect market timing. Indeed, our research shows that setting aside even modest amounts—and continuing to do so when markets turn rocky—can yield better results than trying to anticipate the market’s ups and downs.1 So why do some people wait … and wait?
It’s because they fear making the wrong move at the wrong juncture—something FDR acknowledged when he cautioned a nation in the grip of the Great Depression that “the only thing we have to fear is fear itself.”
One way to combat such fears is with a plan of action, which is why we created Schwab Intelligent Advisory™, which pairs online planning tools with the seasoned advice of a Certified Financial Planner™. By articulating our goals and developing a long-term strategy to reach them, we’re much less likely to succumb to emotion.
Whether you’ve already created a financial plan or are just starting the process, make sure it’ll weather both good times and bad. Because, over the long haul, time in the market almost always beats timing the market.
President & CEO
1“Is There Ever a ‘Bad’ Time to Invest?” schwab.com, 02/17/2017.