Market Timing Is Overrated: Here's Why

By Neil Patel – Mar 30, 2026 at 10:00AM ESTKey PointsInvestors who trade too frequently end up negatively impacting their portfolio performance.To achieve strong long-term returns, investors must be able to handle volatility.The smartest investors understand that time in the market is what matters most.Buy low and sell high. Investors are certainly familiar with this popular adage regarding the stock market. It seems so simple. And of course, who doesn't want to be able to successfully jump in and out of stocks? But this implies, at a high level, that you can properly time the market. While alluring, this is an extremely overrated activity. Here's why. Image source: Getty Images. More trades lead to poor performance Some research suggests too much trading activity actually hurts returns. Investors, often overconfident in their ability to time the market, typically buy and sell at the wrong times. Consequently, this leads to poor portfolio performance. That's because the market frequently registers its biggest gains on the days immediately following its worst declines. It's impossible to consistently avoid the worst days and capture the best ones. Between the start of 2005 and the end of 2024, the S&P 500 (^GSPC +0.56%) generated an annualized total return of 10.4%, according to JPMorgan Chase's Asset Management division. The firm's research reveals that if you missed the 10 best days during this time, your annualized total return would fall substantially to 6.1%. It's difficult to not want to constantly make moves to adjust your portfolio. There's an abundance of information available, driven by the internet that facilitates the creation and distribution of nonstop commentary. This means there's a lot of noise out there. It's hard to ignore this. And it's even more of a challenge to figure out the information that actually matters. Additionally, zero-fee brokerages are common these days. This wasn't the case even 10 years ago. But thanks to the early popularity of Robinhood Markets, the rest of the industry followed suit. Greater portfolio activity can also be incentivized by having no obvious cost to trade. Time in the market is what matters most Charlie Munger, who passed away in 2023, was Waren Buffett's right-hand man for decades at Berkshire Hathaway. He once said, "The big money is not in the buying or selling, but in the waiting." Investors should take this to heart. The stock market is a wonderful wealth-building tool. However, investors should get out of their own ways. The absolute best thing to do is put money to work early and often, preferably in a low-cost S&P 500 exchange-traded fund, and be patient. This allows compounding to work its magic, which can lead to fantastic results over the long term. At the end of the day, volatility can't be avoided. And no amount of effort, like trading extensively or spending extra time researching and crunching numbers, can change this reality. Understand that being able to handle the ups and downs is a requirement for success. The smartest and most disciplined investors know this. And that's why they stay away from timing the market as if their financial lives depend on it.Read NextMar 30, 2026 •By Bram BerkowitzNvidia Stock Just Did Something for the First Time in a Decade. Is This the Buying Opportunity of a Lifetime?Mar 30, 2026 •By Sean WilliamsDon't Look Now, but the Federal Reserve's March Inflation Forecast Just WorsenedMar 29, 2026 •By Adam SpataccoForget Tariffs: The Iran War Is the Biggest Threat to Your Portfolio Right NowMar 29, 2026 •By Adria CiminoWhy Buying the Market Dip Right Now Could Be the Best Financial Decision of 2026Mar 29, 2026 •By Sean WilliamsThe S&P 500 Has Completed This Rare Feat 4 Times in 76 Years, and History Couldn't Be Clearer About What Comes Next for StocksMar 29, 2026 •By Sean WilliamsPrediction: The Trump Bull Market Is Coming to an End, and This Historically Flawless Forecasting Tool Will Be Correct, Yet AgainAbout the AuthorNeil Patel is a contributing Motley Fool stock market analyst covering consumer staples, consumer discretionary, financials, information technology, and communication services. Prior to The Motley Fool, Neil worked in corporate finance roles at JPMorgan Chase and Capital One. He also has experience working on a start-up in the cryptocurrency space. He holds a bachelor’s degree in business administration with a specialization in finance from Ohio State University.TMFNeilPatelStocks MentionedS&P 500 IndexSNPINDEX: ^GSPC$6,404.56(+0.56%)+$35.71*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.