“It’s time in the market, not timing the market, that matters.”

The volatility experienced this year is not unusual by historical standards. For example, in March 2020, share prices as measured by the S&P 500 index jumped by as much as 9.38% in a single day and fell as much as 11.98%. Given the current market volatility, we think it’s worth illustrating the danger of trying to time the market either by moving to a more conservative or higher-risk option. It is wiser to make a choice based on your long-term goals and stay the course.

Sharemarkets move in broad cycles – sometimes referred to as bull and bear markets. A bull market is one in which share prices are generally rising and investors are optimistic. Share prices are generally falling in a bear market and investor sentiment turns negative. The trouble is that it’s very difficult to predict when these cycles will begin and end. Also, prices still go up and down within those (longer) cycles. Even missing good days in bear markets can be costly in terms of long-term returns. This graph shows the impact of being out of the market on the best days over the 20 years ending 31 March 2025 based on an initial investment of $10,000.