Long-term investing usually proves a much more successful approach than timing the market. Market ups and downs can test even the most seasoned investors. But when it comes to building lasting wealth, staying invested and keeping emotions in check often leads to better outcomes than trying to predict the perfect moment to buy or sell.
‘Is now a good time to invest?’ It’s a question that surfaces in every market cycle, especially during periods of uncertainty. For long-term investors, the answer is ‘yes’ more often than not. That’s because successful investing is less about timing the market and more about time in the market.
While downturns can be unsettling, history shows that patient investors who stay the course are typically rewarded. The key is to focus on your long-term goals and resist the urge to react emotionally to short-term noise.
Taking a long-term view
Successful investing is a marathon, not a sprint. When markets fluctuate, it can be tempting to buy and sell investments to avoid losses or chase short-term gains, but this will rarely help meet your longer-term financial goals.
When you examine a long-term stock market chart, the upward trajectory is typically clear. While some short-term fluctuations are inevitable as markets respond to global events, zooming out reveals a consistent pattern of recovery and growth, with markets typically rebounding and reaching new highs over time.
Avoiding emotional investing
We are all human. Emotions play a part in all aspects of life and can be one of the biggest obstacles to investment success. Fear, greed and uncertainty can lead to poor decisions, like selling at the bottom or waiting too long to invest. These reactions are understandable, but can come at a cost.
You may have seen an investment chart illustrating ‘the cycle of human emotions’. The emotions range from optimism up to euphoria, before curving down to panic and capitulation – but then they rise through hope and relief back to optimism.
It’s easy to get caught up in euphoria as markets peak, but this is the point of maximum financial risk and often the worst time to buy new stocks and shares. Conversely, investors who give in to fear as share prices fall can exit the market at what turned out to have been the worst time to sell. Missing the rebound that inevitably follows means they locked in the losses. Likewise, those waiting to invest miss the point of maximum opportunity.
By understanding the emotional cycle of investing and committing to a disciplined strategy, you can avoid common pitfalls and stay aligned with your financial objectives.
The risks of trying to time the market
For individual investors, it is extremely difficult to anticipate and deal with the wide range and speed of events that can impact economies and markets. At any time, external events, investor sentiment and even rumours can have a negative or positive impact, often unexpectedly. Market falls can be sudden – but so can upswings.
Reacting to current conditions is usually too late. To be successful, you would need to foresee both the best time to buy and the best time to sell, and even experienced investors cannot get this right all the time.
Then there is the risk of missing out. It is surprising what a difference certain days in a market cycle can make to returns. If you are not invested because you are waiting for share prices to stabilise, you could miss benefiting from the rebound days if the market suddenly rallies.
To illustrate this, if you had invested £100,000 in the FTSE All-Share index for the full ten-year period up to 31 December 2025, and stayed invested the whole time, you would have enjoyed a profit of £124,020, before fees and charges are applied. Investors who missed just the five and ten best days saw profits drop to £111,180 and £105,000 respectively. Those who missed the 20 and 30 best days saw losses of £94,990 and £87,560 respectively over this 10-year period (all before fees and charges).
Waiting to invest
We often come across people who intend to invest for the long term, but are holding onto available capital. They’re waiting for external events to unfold first to feel more positive that they won’t suffer losses.
Sitting and waiting for the perfect time to invest is effectively trying to time the market. You may not be rewarded for your due diligence, resulting in lower overall returns.
Principles for creating your investment strategy
Work with a wealth management adviser to follow a disciplined investment process:
- Establish your objectives and time horizon.
- Determine your attitude to risk – your adviser should take you through a suitability process to calculate this objectively.
- Carefully construct a portfolio to suit your personal circumstances, goals and risk profile.
- Spread the risk over a range of assets and diversify across regions, sectors, companies, investment styles etc.
- Use quality investment managers.
- Hold your investments within a tax-efficient structure to maximise real returns.
- Be patient and stick to your long-term plan.
- Review your portfolio annually to rebalance the weighting as necessary or adjust it if your circumstances have changed.
Investing is as much about mindset as it is about markets. While it’s natural to feel cautious during turbulent times, trying to time the market rarely works in your favour. Instead, focus on building a well-diversified portfolio that reflects your goals and risk tolerance, and stick with it. With the guidance of a trusted adviser and a long-term perspective, you can navigate uncertainty with confidence and give your savings the best chance to grow.
At Blevins Franks, we provide integrated advice covering investing, tax mitigation and succession planning. We establish a clear understanding of your risk profile, goals, family situation, time horizon and wishes for your heirs before outlining our recommendations in a detailed strategic financial planning report. We use world-leading investment managers to ensure that plans are in place that can identify, monitor and respond to geopolitical risk, giving you peace of mind for the future of your investments.
Get in touch to learn more about our investment services.
These views are put forward for consideration purposes only as the suitability of any investment is dependent on individual circumstances; take individual personalised advice. The value of investments can fall as well as rise as can the income arising from them. Past performance should not be seen as an indication of future performance.
