Waiting for lower prices can seem sensible. The problem is that no one can reliably predict when a dip will happen, how deep it will be, or how long it will last. Markets can keep rising for long stretches, and an investor waiting on the sidelines may end up buying at higher prices than when they started waiting.

There are several reasons waiting for a dip often works against investors.

Timing is hard, even for professionals. Consistently calling short-term market moves is rare, even among full-time investment managers.

Time in the market tends to matter more than timing. Staying invested lets your money compound and gives your portfolio time to recover from downturns. Research also shows that investors' own buying and selling decisions can cost them. Morningstar's 2026 Mind the Gap study estimated that the average dollar invested in U.S. mutual funds and ETFs earned about 8.7% a year over the 10 years ending December 31, 2025. The funds themselves returned about 9.9% a year. That 1.2-percentage-point annual gap reflects when investors bought and sold.¹

Emotions get in the way. Fear of investing at the wrong time, or regret over past decisions, can lead to waiting indefinitely. Volatility is a normal part of investing, and trying to avoid it entirely can mean missing long-term growth.

Waiting has a cost. Cash and other short-term investments may pay more at some times than others, but over long periods they have historically trailed stocks. After inflation, money held in cash can also lose purchasing power over time.

Timing the market is challenging for several reasons:

• Many moving parts: Markets respond to economic data, interest rates, corporate earnings, politics, and global events. These factors interact in complex ways, and short-term price moves often look random.
• Human behavior: Fear, greed, and herd mentality can push markets to overreact in either direction, making short-term moves even harder to predict.
• You have to be right twice: A successful market timer has to decide when to get out and when to get back in. Getting one call right but missing the other can leave an investor worse off than if they had stayed put.
• The best days are hard to separate from the worst: Some of the market's strongest days have come during its most turbulent periods, often shortly after its worst days. According to J.P. Morgan Asset Management, seven of the S&P 500's 10 best days over the 20 years through 2024 occurred within two weeks of one of its 10 worst days. An investor who stayed fully invested earned about 10.6% a year over that period, versus about 6.4% for a hypothetical investor who missed just the 10 best days.² This is an illustration, not a prediction. No investor misses exactly those days, but it shows how much of the market's return can come from a small number of days that are hard to anticipate.
• Costs and taxes: Moving in and out of the market can create trading costs and, in taxable accounts, capital gains taxes. Gains on investments held one year or less are generally taxed at higher ordinary income rates

Missing gains. An investor who sells in anticipation of a downturn that doesn't come, or that comes later than expected, may miss a market rally entirely.

Locking in losses. Selling during a downturn and then waiting too long to reinvest can turn a temporary decline into a permanent loss. This is the opposite of "buy low, sell high."

Opportunity cost. Even an investor who avoids a loss may give up returns by sitting in cash while waiting for the "right" moment.

Taken together, these risks help explain why investors who move in and out of the market often earn less than the investments they own. A disciplined, long-term approach is not guaranteed to do better, but it removes the need to make two difficult calls correctly.

If waiting for a dip isn't the answer, what is? A few steps can help you invest with more confidence.

Set clear goals and understand your risk tolerance

Start by defining what you're investing for, whether it's a near-term goal like a home down payment or a long-term goal like retirement. Then consider your time horizon, financial situation, and comfort with ups and downs. Money you'll need in the next few years generally shouldn't be invested heavily in stocks.

Build a plan and stick to it

A written investment plan should spell out your asset allocation, how you'll choose investments, and when you'll review and rebalance. Having a plan in place makes it easier to stay disciplined when markets get rough.

Diversify

Spreading your money across different asset classes can help manage risk, because different investments often respond differently to the same events. Bonds, for example, have often held up better than stocks during stock market declines, though not always. In 2022, stocks and bonds both fell. Diversification can make a portfolio's ups and downs less severe, which can make it easier to stay invested. It doesn't guarantee a profit or protect against loss.

Lump sum or dollar-cost averaging?

Many people already invest gradually without thinking about it, such as contributing to a 401(k) from each paycheck. The harder question comes when you have a large sum to invest at once, such as an inheritance, a bonus, or proceeds from a sale.

You can invest it all at once (a lump sum), or you can use dollar-cost averaging, which means investing equal amounts at regular intervals over a set period, such as monthly over a year. Because the amount stays the same, you buy more shares when prices are lower and fewer when prices are higher.

Historically, investing a lump sum right away has more often come out ahead, because markets have risen more often than they've fallen. Vanguard research covering 1976 to 2022 found that a lump sum outperformed dollar-cost averaging about 68% of the time.³ The same research found that dollar-cost averaging still generally did better than leaving the money in cash.

Dollar-cost averaging can still make sense. It reduces the risk of investing everything just before a downturn, and for some investors that peace of mind is what makes it possible to get invested at all. The right choice depends on your situation and how you would feel if the market fell soon after you invested.

Neither approach guarantees a profit or protects against loss.

For most long-term investors, the best time to invest is when you have a sound plan in place and money you won't need in the near term. An advisor can help you build that plan, decide how to put new money to work, and stay focused on your goals when markets are volatile.

To learn more about the investment strategies we use for our clients, we invite you to contact one of our Wealth Advisors. Or, if you'd like to receive a complimentary Portfolio X-Ray to identify your current portfolio's strengths and weaknesses, you can contact us here.