By Paul Feeney, Founder and Chief Executive Officer, Otivo
Every would-be investor eventually meets the voice that says wait. Markets look expensive, or shaky, or due for something — better to hold off for the dip, the clarity, the right moment. The voice sounds like prudence. Its track record says otherwise. Nobody demonstrates a reliable ability to call market tops and bottoms — not fund managers with research departments, not economists, and not the confident stranger on the internet — and the waiting itself carries a cost that compounds quietly while the perfect moment declines to arrive. Time in the market beats timing the market has survived decades as a cliche for one reason. It keeps being true.
Timing the market means trying to buy before rises and sell before falls, which requires being right twice — at exit and re-entry. Time in the market means staying invested through cycles, letting long-run growth and compounding work. Because sharp recoveries often arrive unpredictably and cluster near downturns, missed recovery days are the timer's structural hazard, while the patient holder catches them by default.
Why is timing the market so hard?
Because it demands two correct calls, on a deadline, against a crowd. Selling ahead of a fall is the visible half — the forgotten half is buying back in, which must happen near the bottom, at precisely the moment every signal is screaming catastrophe. Most would-be timers who manage the first call fail the second, waiting for confirmation that only arrives after the recovery has run, and confirmation is expensive — a market that has already recovered has already distributed its cheapest prices to whoever stayed.
The deeper problem is where the good days live. Research on market history has repeatedly found that a large share of long-run returns arrives in a small number of very strong days — and those days cluster in and around downturns, when timers are most likely to be standing aside. Missing even a handful of the strongest days takes a measurable bite out of decades of returns. The timer must be present for days that, by their nature, arrive without an invitation. The holder is present for all of them, by default, having made no forecast at all.
What does waiting for the right moment actually cost?
Three costs, and only one of them is visible.
The missed growth while waiting. Money parked for the perfect entry sits out whatever the market does in the meantime — and over long stretches, markets have spent far more time grinding upward than crashing, which makes standing aside the statistically expensive posture.
The impossible re-entry. Waiting has no natural end. If prices rise, the waiter feels too late; if prices fall, the waiter feels vindicated and waits for further falls. Both branches extend the wait — which is why waiting for clarity so often matures into never having invested at all.
The behavioural whiplash. Timers who do act tend to act at emotional extremes — buying enthusiasm near tops, selling fear near bottoms — the exact reversal of the plan, executed with total sincerity each time. ASIC's MoneySmart guidance on investing flags this pattern for good reason; the most reliable destroyer of long-run returns isn't picking wrong assets, it's abandoning right ones at the worst moment.
None of this claims markets only rise or that any outcome is assured — falls are real, sometimes long, and money that might be needed soon doesn't belong in them. The argument is narrower and stronger — for genuinely long-horizon money, the entry moment matters far less than the years that follow it.
What does the alternative look like in practice?
Regular investing on a schedule, indifferent to headlines — the approach known as dollar cost averaging, where a fixed amount goes in at fixed intervals regardless of price. High months buy fewer units, low months buy more, and the investor ends up owning the average without ever having guessed. Its real product isn't a mathematical edge — it's the removal of the timing question entirely, converting investing from a series of stressful forecasts into a standing order. The technique gets its own full treatment in this series.
The other half of the practice is building a portfolio that can be held through the falls — diversified enough that no single failure is fatal, matched to a genuine timeframe, sized so that a bad year is uncomfortable rather than ruinous. Holding through downturns is a design outcome, not a personality trait — portfolios built for their owner's actual horizon and temperament get held, and the holding is where the returns live.
How does someone apply this without a crystal ball?
By replacing the unanswerable question with three answerable ones. Is this money genuinely long-horizon — measured in many years, not months? Is the near ground solid — expensive debts managed, an emergency buffer standing, so no downturn can force a sale at the bottom? And is the amount one the household can commit steadily, through dull markets and dramatic ones alike?
Yes to all three, and the timing question has quietly answered itself — the sensible entry for long-horizon money is when the ground is ready, followed by a schedule. The sequencing beneath those questions — what to pay down, what to buffer, what to invest, in which order — is personal arithmetic, and it's the whole-of-position work Otivo's platform does as regulated advice under AFSL and Australian Credit Licence No. 485665, weighing a household's debts, income, expenses, and goals together.
Frequently asked questions
Is it a bad time to start investing when markets are at highs?
Markets spend a great deal of history at or near highs on the way to later highs, which is why the question tends to mislead. For long-horizon money invested steadily, the start date matters far less than the years invested — and a schedule ensures later purchases catch whatever prices come.
Should an investor sell when a crash looks likely?
Crashes look likely far more often than they happen, and acting on the looks means re-entering correctly too — the double call that defeats professionals. Investors worried about downturns are usually better served examining whether their portfolio matches their horizon and temperament than attempting the forecast.
Does time in the market guarantee a positive return?
No — nothing does, and any specific period can disappoint. Longer horizons have historically improved the odds and moderated the range of outcomes, which is the honest form of the claim — time reduces the role of luck, without abolishing risk.
Sources
- ASIC MoneySmart — How to invest. moneysmart.gov.au/how-to-invest
- ASIC MoneySmart — Shares. moneysmart.gov.au/shares
- RBA — The Australian economy and financial markets chart pack. rba.gov.au/chart-pack
Disclaimer
The information in this communication is current as at July 2026 and has been prepared by Otivo Pty Ltd ABN 47 602 457 732, AFSL and Australian Credit Licence No. 485665. This content is general information only and has been prepared without taking into account your objectives, financial situation or needs. It is not personal financial or taxation advice and should not be relied on as such. Before acting on any information, you should consider its appropriateness having regard to your personal circumstances. This material must not be reproduced in whole or in part, or posted on any social media platform, without the prior written consent of Otivo Pty Ltd.