Avoid Market Timing
Investing in the stock market is about staying the course. Trying to time the market is a losing game—no one has a crystal ball. Instead, a disciplined investment philosophy and a strict set of core rules provide the next best thing. A proven strategy, combined with discipline, helps combat the number one reason investors underperform: human emotions.
Most investors lag behind the market because of poor timing decisions. In a 2017 CNBC interview, Warren Buffett said, “I don’t know anybody that could time markets over the years,” and warned against staying out of a good long-term investment simply because of short-term uncertainty. If one of the greatest investors of all time insists market timing is a mistake, why bet against that wisdom?
Barry Ritholtz, host of Bloomberg’s Masters in Business podcast, put it bluntly: “The lesson about timing is: not only do you not know when to get in, you don’t know when to get out. And when you market-time, you have to be right twice. And nobody, and I really believe this—nobody but nobody—can do that.”
The Danger of Emotional Investing As Benjamin Graham famously said, “The investor’s chief problem—even their worst enemy—is likely to be themselves.” Decades of behavioral finance research confirm this. The DALBAR Quantitative Analysis of Investor Behavior study shows that over the past 30 years, the average investor has significantly underperformed nearly every asset class—and barely kept pace with inflation—primarily due to emotional decision-making.
Jesse Livermore, one of the most legendary investors, captured this reality nearly a century ago: “All through time, people have basically acted and reacted the same way in the market as a result of greed, fear, ignorance, and hope.” He also emphasized that “emotional control is the most essential factor in playing the market.”
Successful investing isn’t about trading stocks—it’s about owning great companies. Research, patience, and discipline are what matter most.
A Case Study in Discipline
In 2018, our investment team faced a major test when holding positions in Walgreens and CVS Health. The stocks plunged after rumors surfaced that Amazon was entering the pharmacy space. By June, those rumors became reality when Amazon announced its acquisition of PillPack.
Rather than reacting emotionally, we returned to our core investment principles. We re-evaluated the fundamentals of both businesses and reaffirmed our conviction. Despite the short-term volatility, both stocks recovered—Walgreens rallied over 40% from its June low, and CVS climbed nearly 30%.
When major news events shake the market, disciplined investors reassess, but they don’t panic. Sometimes an undervalued stock is bought earlier than the ideal time, but patience often pays dividends—literally and figuratively.
The Power of Staying Invested Investor psychology plays a critical role in long-term success. The media thrives on doom-and-gloom headlines, fueling fear-based decision-making. But reacting to short-term noise is a costly mistake. As economist Eugene Fama put it, “Money is like soap—the more you handle it, the less you’ll have.”
The key is to stick with a disciplined, value-driven strategy. A structured, repeatable process—not market timing—is what leads to outperformance over time. Through every market cycle, those who stay the course are the ones who come out ahead."
