With major market indices—including the S&P 500 Composite, the Nasdaq Composite, and the S&P/TSX—hitting new all-time highs, and with assets like gold and silver appearing to move almost parabolically, it’s natural to wonder if a period of consolidation is due. Forward price-to-earnings ratios suggest equity markets are trading at elevated levels relative to historical averages, reinforcing the perception that stocks are “expensive.” Add in signs of a weakening job market and growing concern that much of the market’s strength is being driven by capital expenditures and earnings from the “Magnificent 7,” and it’s no surprise many investors are hesitant to put new money to work right now.
Against that backdrop, one of the most common questions I get is: “Is now really a good time to invest? Equities look expensive—shouldn’t I just wait for a pullback?”
It’s a fair question, and one I’ve been asked countless times over my 25 years as an institutional portfolio manager and strategist. Having worked with some of the brightest minds in the industry, I can say this with confidence: I’ve never met anyone who can consistently time the market.
That’s not to say people never get it right—everyone occasionally makes a good call. But doing it reliably, across decades and different market environments, is something I have never witnessed. And the data is clear: trying to time the market is a losing game compared to simply staying invested.
As the old saying goes: “It’s time in the markets, not timing the markets.”
What If You Only Invested at Market Tops?
I’ve been unapologetically bullish over the last several years. But even I have to admit—looking at equity index charts over the past month—the recent market melt-up looks concerning. That doesn’t necessarily mean a crash is imminent, but a period of consolidation that allows earnings to catch up with prices would be healthy for the market at this stage.
Adding to this unease are growing concerns that some of the recent AI-related investments involve companies effectively making circular deals—investing in each other—which is fueling fears of a developing bubble. Yet, the shift toward easier monetary policy could just as easily extend the rally, providing more liquidity and momentum for risk assets.
In fear of dating myself, this feels reminiscent of the dot-com run-up in the late 1990s and the surge in oil prices in the mid-2000s, when portfolio managers didn’t necessarily want to buy but felt compelled to in fear of being left behind.
The fear of “buying at the top” remains one of the biggest behavioral hurdles investors face. It can feel reckless to commit capital when markets are at all-time highs, but as history shows, the risk of not investing can be even greater.
What Does the Data Tell Us?
History tells a very different story: even the worst-case scenario—investing only at peaks—has still produced strong returns over the long term.
According to data from Exhibit A, since 1950, investing at the very peak of each bull market has still delivered an average annualized return of 8.8%. In other words, even with “bad luck” entry points, long-term investors have been rewarded. Why? Because markets reflect innovation, productivity, and earnings growth over time. The upward drift is real, and it tends to overpower short-term drawdowns.
This is especially true if you have a long time horizon—time is your greatest weapon. Historically, markets trend higher over decades, not lower. The flip side is equally important: sitting out while markets continue to rally—particularly as central banks ease interest rates and inject more fuel into risk assets—can mean waiting a long time for that elusive pullback. And nobody knows with certainty when it will arrive. It could be tomorrow, or it could be years from now.
The danger is that market timing often causes investors to miss more upside than the downside they avoid. Calling the top is difficult, but calling the bottom—and knowing when to get back in—is equally, if not more, challenging.
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The Cost of Waiting: Missed Opportunity
The other danger of waiting for the “perfect entry point” is that it often means sitting on the sidelines while markets continue to advance. The opportunity cost of being out of the market is enormous.
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This chart shows the growth of $1 in the S&P 500 since 1950. Staying fully invested would have grown that dollar to $405. Missing just the 50 best days over that period reduces the outcome to $28. Missing the 100 best days? Just $5.
And here’s the kicker: the best days tend to cluster right after the worst days. Investors who try to “get out” during volatility often miss the sharpest rebounds.
Why Market Timing Doesn’t Work
Academic research has tested timing strategies for decades, and the conclusions are remarkably consistent: short-term entry points matter far less than simply staying invested. A few key findings:
- Siegel (1994), Stocks for the Long Run
Shows that while equities are volatile in the short term, over 10-year rolling periods U.S. stocks almost always deliver positive real returns. Longer horizons reduce the risk of negative outcomes—even if you bought at market highs.
- Henriksson & Merton (1981), Journal of Business
Develop canonical tests of market-timing skill. The empirical evidence that follows suggests little to no persistent timing ability among professionals. In other words, calling tops and bottoms consistently is extremely difficult.
- Dichev (2007), American Economic Review — “What Are Stock Investors’ Actual Historical Returns?”
Finds that investor-level (dollar-weighted) returns—i.e., returns that factor in investors’ actual timing decisions—are systematically lower than simple buy-and-hold returns across markets. That’s strong evidence that market timing often hurts real investors.
My Perspective After 25 Years
Markets will always have pullbacks. On average, the S&P 500 experiences roughly a 14% intra-year decline, yet most years still finish positive. This is normal—not a sign of imminent collapse.
I’ve watched markets through dot-com bubbles, financial crises, and pandemics. I’ve seen fear drive people out at the wrong time, and I’ve seen patience rewarded. If there’s one lesson I keep coming back to, it’s this:
It’s not about timing the market—it’s about time in the market.
Instead of trying to outguess short-term moves, the smarter approach is to ensure you have a properly constructed portfolio that matches your objectives and risk tolerance—and then trust that portfolio to do its job. By making regular contributions and staying disciplined, investors benefit from compounding, diversification, and the natural upward drift of markets over time.
If you want to navigate uncertain markets successfully, here are three guiding principles that have stood the test of time:
- Build a diversified, long-term portfolio.
Your portfolio should be built around a clear strategic asset mix—allocating across equities, fixed income, and alternatives—not just chasing what’s working today. A well-constructed portfolio acts as a roadmap for your long-term success. Allocate to the model, not the mood of the market, and trust the process.
- Include defensive elements.
Every portfolio benefits from ballast. Whether that comes from active managers with a defensive tilt, strategies that emphasize downside protection, or factor-based approaches such as low volatility, having these elements helps smooth the ride when markets get choppy and reduces concentration risk—especially around the so-called Magnificent 7. Defensive positions are like the brakes on a car—you don’t drive without them.
- Rebalance regularly.
Rebalancing forces discipline. It allows you to systematically take profits from areas that have appreciated and reallocate to segments that may be undervalued. Over time, this process enhances risk-adjusted returns and keeps your portfolio aligned with your intended risk profile.
So when I’m asked whether now is a good time to invest, my answer is almost always the same: the best time was yesterday, and the second-best time is today. The key is not to wait for the perfect moment, but to build the right portfolio, stay invested, and trust time and discipline to do their work.
Disclosure:
Quintessence Wealth, a registered Portfolio Manager in Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island, Quebec, and Saskatchewan, an Investment Fund Manager in Newfoundland and Labrador, Ontario, and Quebec, and an Exempt Market Dealer in Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Quebec, and Saskatchewan. The Ontario Securities Commission (OSC) is the principal regulator for Quintessence Wealth.
The opinions expressed are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. The information contained herein may not apply to all types of investors. The opinions in this market outlook were prepared by Alfred Lee as of the date of this report and are subject to change without notice. The opinions expressed in this report are that of the author and do not necessarily reflect the opinion of Q Wealth as a firm. This report is not to be construed as an offer or solicitation to recommend Q Wealth products to clients.
