Is Now a Bad Time to Invest? What 90% of Investors Get Wrong About Timing the Market

$250,143 versus $13,322. That's the difference between staying fully invested in the S&P 500 from January 1993 through December 2025, and missing just the 60 best trading days over that same 32-year stretch, according to data compiled by NEI Investments.

Miss only the 10 best days, and your ending balance drops to $114,599, less than half of what you'd have earned by simply staying put the entire time.

I think that single comparison explains almost everything worth knowing about why market timing fails as often as it does, and why "is now a bad time to invest" is usually the wrong question to be asking in the first place.

The Data Behind the "90%" Figure

Before going further, I want to be precise about where a claim like "90% of investors who try to time the market end up worse off" actually comes from, because it's really a composite picture built from several well-documented, independent sources rather than one single study.

SPIVA, the widely cited research series tracking active fund manager performance against benchmark indexes, has found that somewhere between 88% and over 90% of actively managed funds underperform their benchmark over 15 to 20-year periods.

These are professional managers with research teams, institutional data access, and full-time focus on exactly this task, and the overwhelming majority still can't beat a simple, unmanaged index over the long run.

DALBAR's Quantitative Analysis of Investor Behavior, an annual study specifically tracking individual investor behavior rather than professional fund managers, consistently finds that the average investor underperforms the market itself by roughly 3 to 4 percentage points annually, largely attributable to poorly timed buying and selling decisions rather than poor investment selection.

Compounded over 20 years, that gap can reduce a portfolio's final value by 50% or more compared to simply staying invested throughout.

A separate, frequently cited academic study by professors Brad Barber and Terrance Odean, examining the trading records of more than 66,000 households, found that the most actively trading investors significantly underperformed the market, with that performance gap tending to widen specifically during volatile periods, exactly the moments when the temptation to time an exit or entry feels strongest.

Taken together, these independent bodies of research consistently point in the same direction, even if no single one of them produced the exact "90%" figure as a standalone statistic.

I think that's worth being upfront about, since the honest version of this claim is "the overwhelming weight of long-term evidence points this way," not "one specific study proved a precise 90% figure."

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Why Missing the Best Days Is So Devastating

I want to return to that missing-best-days data, because I think it's the single most useful concept for understanding why market timing fails so consistently. The problem isn't that market timers are unusually bad at predicting the future.

It's that the market's best days and worst days tend to cluster together unpredictably, often within the same volatile stretches, which means an investor who pulls out during a downturn to avoid further losses frequently ends up missing the sharp recovery days that follow shortly after, often before they've worked up the confidence to get back in.

Since a small number of days account for an outsized share of long-term returns, missing even a handful of them at the wrong moment can permanently damage decades of compounding.

This is exactly why "sit out until things look safer" so often backfires. By the time conditions genuinely look safer, a meaningful chunk of the recovery has frequently already happened, and the investor who stayed out is left trying to catch up from a worse starting position than if they'd simply stayed invested through the volatility.

What the Historical Record Actually Shows

I think it also helps to look at how often downturns have actually resolved themselves over time, rather than assuming any given decline is uniquely dangerous.

Since 1928, the S&P 500 has experienced 27 separate bear markets, declines of 20% or more from a recent high, yet stocks have still risen in roughly 78% of all years measured. Over the past 40 years specifically, despite an average intra-year decline of about 14%, the index still finished the year higher in 31 of those 40 years.

That doesn't mean every downturn resolves quickly or painlessly, and it certainly doesn't guarantee anything about the future.

But it does mean that a market experiencing a meaningful decline, which is the exact moment "is now a bad time to invest" tends to get asked most urgently, has historically still been more likely than not to finish that same year higher rather than lower.

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Why "Is Now a Bad Time" Is Usually the Wrong Question

I think the honest issue with this question is that it assumes there's a reliably identifiable good time and bad time to invest, distinguishable in advance, which the entire body of research above argues against.

Simple, rules-based timing strategies, things like moving average signals that attempt to get in and out based on recent price trends, have been shown to underperform simple buy-and-hold approaches by roughly 1 to 2 percentage points annually, while also producing higher volatility, not lower.

That's a genuinely counterintuitive finding for anyone who assumes timing exits reduces risk.

In practice, it often increases the very risk it's meant to protect against, the risk of a permanently damaged long-term return, while doing little to actually reduce short-term volatility.

Studies of active traders attempting to time entries and exits show typical annual returns closer to 4%, compared to roughly 7% for a simple buy-and-hold approach to the same market over the same period.

Compounded over two decades, that gap turns a $10,000 investment into roughly $22,000 for the active timer versus roughly $38,000 for the investor who simply stayed invested, a meaningfully different outcome from what feels, in the moment, like the more cautious and protective choice.

A More Useful Question to Ask Instead

Rather than asking whether now is a good or bad time to invest broadly, I think a more productive set of questions looks like this instead.

Does your current asset allocation still match your actual risk tolerance and time horizon?

This is worth revisiting periodically regardless of what the market is doing, since your own circumstances change over time even when broad market timing signals don't offer anything reliable.

Are you holding a genuinely diversified mix appropriate for your goals, rather than concentrated in a single volatile asset or sector out of excitement or fear?

Diversification doesn't eliminate risk, but it does reduce the damage from being wrong about any single bet, which matters more than trying to be right about market timing.

Would a modest, periodic rebalancing approach serve you better than an all-or-nothing exit or entry decision?

Tactical rebalancing, meaning small, occasional adjustments back toward your target allocation as markets shift, involves considerably smaller moves, typically 5 to 10% portfolio adjustments, rather than large, wholesale exits or entries based on a prediction about where the market is headed next.

Are you investing consistently over time rather than trying to find one perfect entry point?

Dollar-cost averaging, investing a fixed amount at regular intervals regardless of what the market is doing that particular week or month, is a genuinely low-maintenance way to reduce the specific risk of committing a large sum right before a downturn, without requiring you to correctly predict anything about short-term market direction.

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Investing Through Uncertainty

I think this framework is particularly relevant given how much genuine uncertainty is layered into the current environment, an unresolved US-Iran conflict affecting energy prices and inflation, a new Fed chair explicitly avoiding forward guidance, and volatile crypto and equity markets reacting sharply to each new headline.

It would be entirely understandable to feel like "now" is a uniquely uncertain time to invest. I'd gently push back on that framing.

Every period in market history has had its own version of "this time feels uniquely uncertain," and the data above spans exactly those kinds of periods, recessions, geopolitical shocks, inflation surges, and plenty of others, without changing the fundamental pattern: investors who stayed invested through the volatility have historically fared better than those who tried to time their way around it.

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Conclusion

I think the honest answer to "is now a bad time to invest" is that it's almost always the wrong question, not because timing never matters at all, but because decades of independent research, from professional fund manager performance data to individual investor behavior studies to the simple math of missing a handful of the market's best days, all point toward the same conclusion.

The investors who consistently do better aren't the ones who correctly predicted the next downturn or rally.

They're the ones who built a genuinely appropriate allocation for their own goals and risk tolerance, then stayed invested through the noise rather than trying to outsmart it.

That's a less exciting answer than a confident prediction about where markets are headed next, but it's the one the actual data supports.

About the Author: Abdullah is the founder of Elite Pulse Global and a writer focused on personal finance, investing, and wealth-building strategies, drawing on his experience running a manufacturing business and managing its finances day to day. He focuses on practical money decisions — budgeting, investing, and building long-term financial discipline — over trends and hype.