When markets feel uncertain, it’s very easy to think along these lines:

“Maybe I should move my investments to cash for a while and wait until things calm down.”

On the surface, that sounds perfectly reasonable, but in reality, this strategy requires something incredibly difficult to achieve.

You have to make two perfect decisions:

Getting either of those decisions wrong can have a significant impact on long-term returns and the reality is that even professional investors struggle to do this consistently.

Markets don’t move in neat, predictable patterns. They react quickly to new information, and recoveries often begin long before the news itself improves.

One of the biggest challenges with market timing is that markets are forward-looking. Prices adjust based on expectations of the future, not simply what’s happening today. A good example of this was the COVID-19 market crash in 2020. In March of that year, global markets fell sharply as lockdowns spread across the world. The MSCI World Index dropped by roughly 30–35% in just a few weeks. At the time, the outlook felt incredibly uncertain. However, markets began recovering almost immediately afterwards and months before vaccines were available and long before the pandemic itself had ended. By the end of 2020, many global markets had already recovered their losses and moved higher. Investors who sold during the panic and waited for certainty often found that markets had already moved significantly higher by the time they felt comfortable reinvesting.

There’s another reason why trying to time the market can be so damaging to long-term returns.

Some of the strongest market days tend to occur very close to the worst days.

In fact, research looking at long-term market data shows something quite striking.

Seventy-eight percent of the stock market’s best days have occurred during a bear market (prices falling), or within the first two months of a new bull market (prices rising). In other words, the biggest upward moves often happen right when investors feel the most uncertain.

If an investor missed just the 10 best days in the market over the past 30 years, their overall investment returns would have been cut roughly in half. Miss the best 30 days, and their returns would have been reduced by an astonishing 83%.

Think about that for a moment, over a 30-year investing journey there are roughly 7,500 trading days. Yet missing just 30 of those days, less than half of one percent of the time can dramatically reduce long-term wealth and the difficult part is that those best days rarely arrive when everything feels calm and comfortable again. They tend to appear during periods of volatility, when investors are most tempted to step aside and wait for clarity.

This is where proper financial planning becomes incredibly valuable.

That typically means:

When those foundations are in place, short-term market movements rarely require dramatic changes. The majority of the time the most productive investment decision during uncertain periods is to do absolutely nothing.

Moments like the one we’re experiencing now naturally create uncertainty. Markets will react to global events, that’s part of how they function, but history consistently shows that trying to jump in and out of markets during periods of volatility is extremely difficult to do successfully.

For long-term investors, patience, discipline and perspective have historically been far more valuable and beneficial than trying to predict the next market move.

So sit tight and stick to the plan.