Investing FOMO: Why Waiting Might Cost You More
Markets have taken a hit recently, leaving some investors questioning their next move—but history shows that staying invested often beats trying to time things perfectly. Here’s why a long-term view could be your best strategy.
After a strong run of performance, markets have taken a bit of a wobble over the past month, which has understandably made some investors feel uneasy.
That said, if you’ve been invested for a while, you’re probably still sitting on some decent gains. For example, if you’d put money into the MSCI World Index five years ago, your investment would have grown by around 158% as of 11 April this year. Not bad at all, even with recent dips.
But if you’re new to investing, it can feel like a strange time to get started—especially when it seems like everyone else is selling. The challenge with that thinking is this: no one really knows when the market is going to bounce back or drop again. Even seasoned professionals can’t reliably time the market.
What we do know is that markets have always recovered over time. The tricky part is that the biggest gains often come suddenly—and missing those days can really hurt your long-term returns.
April was a perfect example of how unpredictable things can be. On Friday the 4th, the S&P 500 dropped by 6%, and just a few days later, it jumped by 9.5%. That kind of swing is hard to time right. In fact, seven of the 10 best market days over the past 20 years happened within two weeks of the 10 worst days. It just shows how tightly gains and losses can cluster together.
It’s also worth thinking about when that five-year growth period began. April 2020 was right at the start of global lockdowns. We were in completely uncharted territory with no idea how long the pandemic would last—or what the economic fallout would be. And yet, markets not only recovered, they surged beyond their pre-Covid levels.
Of course, every downturn is different, and recovery timelines vary. But the one constant is that markets have always come back stronger in the long run.
Trying to perfectly time your entry into the market is near impossible. What tends to matter much more is how long you stay invested. The longer you’re in, the more time your money has to ride out volatility and benefit from compounding growth.
Even if, by some stroke of bad luck, you invested at the worst possible time each year, history still shows encouraging results. Capital Group ran a study comparing two hypothetical investors: one who invested on the best day each year (the market low), and one who invested on the worst day (the market high). Over 20 years, the ‘perfect timer’ averaged 12.6% annually. But the ‘worst timer’? Still managed 10.8% a year. That’s a pretty good outcome for getting it “wrong” every time.
The takeaway? Time in the market really does beat trying to time it.
So rather than basing your decision on short-term headlines, it’s worth stepping back and thinking about your own goals. Whether it’s saving for a property, supporting your children’s education, or building long-term financial freedom, getting started sooner rather than later could make all the difference.
As ever, I’m happy to talk through what might work best for your situation.
Will is an Independent Financial Adviser with over a decade of experience helping expats make the most of their international status.