Why timing the market rarely works

Market timing requires two good decisions

Timing the market means trying to move out before falls and back in before recoveries. It sounds sensible, but it is very difficult to do consistently.

The first challenge is knowing when to sell. Markets can look worrying long before they fall, and they can keep rising after they seem expensive.

The second challenge is knowing when to return. Recoveries often begin when the news still feels bad. Waiting until everything feels safe can mean missing an important part of the rebound.

For long-term pension investors, staying invested through difficult periods is often more realistic than trying to make perfect timing decisions.

A steadier approach

• Choose a risk level you can hold.
• Use regular contributions where possible.
• Review the plan, not every market headline.
• Avoid all-or-nothing switches.
• Make changes because your plan changed, not because markets feel noisy.