Why Market Timing Rarely Works - and What to Do Instead
2026 has brought its share of market anxiety. Geopolitical tensions, rising oil prices, and a stretch of weekly losses in the markets have prompted many investors to ask the same question: Should I have gotten out earlier? It is a reasonable question. But the research consistently points in one direction: trying to time the market is one of the most expensive decisions an investor can make.
The Problem with Market Timing
Market timing requires you to be right twice. You have to correctly identify when to sell near a peak - and then correctly identify when to buy back in near a bottom.
Most investors get one of those calls wrong. Many get both wrong. And the cost of being on the sidelines for even a handful of days can be dramatic.
Hartford Funds data from 2025 illustrates this clearly. A fully invested S&P 500 investor earned approximately 17.88% for the year. Here is what missing just a few of the market's best days would have meant:
• Missing the best 1 day: return dropped to 7.64%
• Missing the best 2 days: return dropped to 4.23%
• Missing the best 3 days: return dropped to 1.67%
• Missing the best 4 days: return turned negative at -0.46%
The best days in the market frequently occur during periods of peak volatility - often right after a sharp selloff. Investors who move to cash during turbulence are the ones most likely to miss them.
What Has Driven Volatility in 2026
Several factors have kept markets on edge through the first half of the year:
• Middle East tensions pushed oil prices above $110 per barrel, raising concerns about inflation and global supply chains.
• The Dow Industrials closed lower for five consecutive weeks - one of the longest losing streaks in recent memory.
• Federal Reserve policy remains uncertain, with markets watching closely for signals on the timing and pace of any rate changes.
• November midterm elections are adding a layer of political uncertainty that typically increases short-term market volatility.
None of these developments is without consequence. But they are also not new. Markets have navigated geopolitical crises, rising energy prices, and policy uncertainty before, and long-term investors who stayed the course have historically been rewarded for doing so.
How We Build Financial Plans to Handle Volatility
At DeLong & Brower, we use a strategy called Advanced Time Segmentation (ATS) to help clients stay invested through exactly these kinds of periods.
We structure portfolios so that the next seven years of anticipated distributions are held in conservative, fixed-income-focused investments. That money is not exposed to stock market swings. It does not need to be sold during a downturn. It is simply there, stable and accessible, when you need it.
Further out on the timeline - money you will not need for many years - we take on more risk, because time is on your side. That portion of the portfolio is positioned to grow, with the understanding that short-term volatility is the price of long-term returns.
The result is a plan that does not require you to make perfect decisions during imperfect markets. When headlines get loud, your near-term income is already protected. You do not need to sell. You just need to stay the course.
What the Research Says About Staying Invested
Decades of market history support one consistent conclusion: time in the market matters more than timing the market. Investors who remain invested through volatility tend to capture the recoveries that follow downturns. Those who move to the sidelines often miss them.
This is not an argument for ignoring risk. Portfolio construction, asset allocation, and regular rebalancing all play important roles in managing risk. But those are planning tools - not reactions to last week's headlines.
As Warren Buffett has noted, in investing, the rearview mirror is always clearer than the windshield. The investors who feel most certain they "should have sold" are typically looking backward at a market bottom that is already behind them.
The Right Response to Market Volatility
When markets get noisy, the most productive thing most investors can do is return to their financial plan - not revise it based on current events. A well-built plan already accounts for the fact that markets will have difficult stretches. The volatility is not a surprise; it is the environment the plan was designed to navigate.
A few questions worth asking during periods like this:
• Has anything in my actual financial situation changed, or just the headlines?
• Is my portfolio still aligned with my time horizon and risk tolerance?
• Am I reacting to discomfort, or responding to a genuine shift in my goals?
If you want to walk through exactly how your portfolio is positioned for periods like this, give us a call. We are here to work through those questions with you. Reach us at support@delongbrower.com or (616) 394-0500.
All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful.
Investors cannot invest directly in indexes. The performance of any index is not indicative of the performance of any investment and does not take into account the effects of inflation and the fees and expenses associated with investing.