‘Time in’ the market, not ‘timing’ the market

24 March 2026

Many investors ask the question ‘should I wait for the right time to invest?’ History has shown that instead of trying to time an investment decision, starting early and staying invested over the longest period of time is the best answer. 

Most investors want to time the market in the hope that they can buy low and sell high to maximise investment returns. However, in reality, predicting the best time to invest is very difficult. And while history can’t tell you when volatile periods or movements will occur, it does show that financial markets eventually recover from even the most turbulent times.

By withstanding short-term fluctuations and staying invested for the longer term tends to bring positive returns over time. This is why ‘time in’ the market, not ‘timing’ the market, can offer more stable long-term investment growth. Investors who try ‘timing’ the market aim to outperform by looking for the lowest or highest point in the market cycle. On the other hand, those who spend ‘time in’ the market are investors who focus on the fundamentals of an investment and hold it for the longer term.

If your aim is to grow your investments over the long term, starting sooner, rather than later, is usually more important than whether you are investing at low or high points in financial markets. This is due to the effect of compound interest. The longer the investment period, the greater the compounding effect of the returned interest. By reinvesting your earnings, this allows your original investment to continue growing along with the money generated by your investment, increasing the effect it has on growth.

To illustrate this, Chart 1 below shows what happened to $1,000 invested in global stocks at the monthly low or high, every month since January 2004. Whether investing at the monthly low or high, it does not create a significant difference in the end value, what matters most is the compounded growth over the period of time that helps grow the investment.

Source: Bloomberg, HSBC Asset Management, Investing = MSCI ACWI Net Return Index, 1 January 2004 to 31 December 2025. Past performance is no guarantee of future returns

When investors try to time the market, they run the risk of missing out on some of the best performing days. Even missing just a few of those can result in a big difference in their returns. Chart 2 below shows the impact that missing the top 20 days can have over time, showing an initial investment of $100,000 that remained fully invested grew to $598,666, but was only $208,700 if the top 20 performing days were missed. 

Source: Bloomberg, HSBC Asset Management. Returns are for developed market stocks – MSCI World Daily Total Return Gross World Index, as at 31 December 2025. 

If you are nervous about investing a lump sum, you can split the amount and make regular investments. Regular investing helps smooth out the effects of market movements and this approach can help you stay the course with an investment plan by reducing the impact of short-term market movements on your portfolio.