“Time in the market beats timing the market.” … But is that really true?

Have you ever wanted to invest in the stock market but resisted the urge because you felt you could buy into the market at the perfect time to get a better deal? If so, you’re not the only one who has tried.

You may be successful timing the market once, maybe twice, or even a few times. But generally speaking, you cannot time the bottom of the market—and many veteran investors and traders would agree.

Why is trying to time the market detrimental?

The market can go up as quickly as it can go down. In fact, many of the best-performing days of the stock market have come within a close time frame from the worst-performing days of the market. If you sold out of the market during market downturns, you could easily miss out on the best-performing market days, thus slashing your total lifetime earnings by a significant amount.

What can you do?

Diversify your portfolio to reduce your risk, and stay invested in the market.

When the market is doing well, you may invest at a rate of 1x. During market downturns, you may consider increasing your investment rate to 1.5 or 2x.