answer like a pro

“I’ll wait for the market to go down before investing.”

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“I’d rather wait for the market to drop” — here’s how to respond to this risky strategy.

Waiting for the next downturn: a risky strategy, not a winning one

The idea of waiting for the market to “go down” before investing may seem, at first glance, perfectly sensible. Why invest today when everything is “expensive”? Why not wait to buy “on sale”? This strategy, though popular, is based on an illusion of control. In practice, trying to predict the bottom of the market is extremely difficult — even for professionals.

In the financial world, this attitude is known as “market timing,” which means trying to synchronize your investments with the highs and lows of the markets. And all research confirms it: market timing almost always loses in the long run.

1. The market is unpredictable, even for experts

Dozens of studies show that it’s nearly impossible to consistently predict market highs and lows.

A 2023 study by Dalbar Inc. found that investors who try to time the market achieve significantly lower returns than those who stay invested for the long term. Why? Because they often miss the market’s best days.

For example, according to JP Morgan Asset Management, an investor who had $10,000 invested in the S&P 500 between 2003 and 2022 would have ended up with nearly $65,000 after 20 years. But if they had missed the 10 best trading days, they would have had only $29,000. And those best days often occur during periods of high volatility — exactly when the average investor tends to leave the market.

2. The best time to invest is as soon as you’re ready

Waiting for a dip means risking staying on the sidelines for a long time. Meanwhile, your money loses value due to inflation, and you miss out on compounded returns.

One of the key principles of financial planning is that **time in the market** matters far more than **timing the market**.

Even if you invest before a temporary downturn, history shows that markets always recover, and declines are often followed by quick and powerful rebounds.

3. Investing gradually is a more effective and less stressful strategy

If you’re afraid to invest a large sum all at once in a volatile market, you can use a proven strategy: **dollar-cost averaging**.

This means investing a fixed amount every month, regardless of market levels. This approach smooths out fluctuations, lets you buy more shares when prices are low and fewer when they’re high. It removes the stress of “picking the right time” and encourages consistent, disciplined investing.

4. What you risk by waiting: the cost of inaction

While you wait for the perfect dip (that never comes or comes too late), you lose:
  • months or even years of potential returns,
  • the magic of compound interest,
  • the possibility of reaching your goals faster (retirement, projects, independence).
As the famous investor Peter Lynch once said:

“Far more money has been lost by investors trying to anticipate corrections than has been lost in the corrections themselves.”

5. A good plan is better than good timing

The role of a financial advisor is not to predict the markets, but to help you build a strategy aligned with your goals, time horizon, and risk tolerance. It’s that strategy — not the exact entry point — that determines your long-term success.

Rather than waiting for a hypothetical drop, you can start with a well-diversified portfolio, tailored to your situation, and adjusted over time.

In conclusion

Waiting for the market to drop seems logical… until you realize that no one knows when that moment will come — or if it will come in time. History shows that the disciplined investor outperforms the one who tries to predict.

So instead of asking, “When will the market go down?”, ask yourself:

“When am I ready to start growing my money for my future?”

Sources :

  • Dalbar Inc., Quantitative Analysis of Investor Behavior, 2023
  • JP Morgan Asset Management, Guide to the Markets, 2023
  • Peter Lynch, One Up on Wall Street, 1989