• Financial readiness comes first. Before investing, consider your emergency savings, outstanding debt, upcoming expenses, and long-term financial goals.
  
• Your investment timeline matters. Money intended for retirement decades away can generally be invested differently than funds needed within the next few years.
  
• Waiting for a market downturn carries risks. Predicting when stocks will rise or fall is difficult, and staying on the sidelines could mean missing potential growth.
  
• Dollar-cost averaging offers another option. Investing a fixed amount at regular intervals can help manage concerns about committing a large sum all at once.
  
• Your investment strategy should reflect your financial plan. A diversified portfolio designed around your goals and risk tolerance may be more useful than trying to anticipate short-term market movements.

Market timing involves attempting to predict price movements so you can buy investments when they're inexpensive and sell when prices are high.

Although the concept sounds straightforward, consistently getting those predictions right is challenging. Investors must accurately determine both when to exit the market and when to get back in. A decision that appears sensible during a market decline could mean missing a sudden recovery.

Three factors make market timing especially difficult:

1. Markets respond to unpredictable events. Economic reports, interest rate changes, geopolitical developments, and investor sentiment can move stock prices quickly, sometimes in unexpected directions.
   
2. Emotional reactions can interfere with investment decisions. Fear may prompt investors to sell during downturns, while enthusiasm during a rally can encourage buying at elevated prices.
   
3. Some of the market's strongest days occur close to its weakest. Moving investments into cash during periods of volatility may reduce exposure to losses, but it can also mean missing substantial gains.

What Does Historical Market Performance Tell Us?

J.P. Morgan Asset Management's 2026 Guide to Retirement illustrates the potential cost of missing the market's strongest trading days.

According to the report, a hypothetical $10,000 investment in the S&P 500 from January 2, 2006, through December 31, 2025, would have grown to approximately $80,619 if it remained fully invested. Missing just the 10 best trading days during that period would have reduced its ending value to approximately $35,866.

The study also found that six of those 10 best days occurred within two weeks of the 10 worst days.

These figures illustrate how difficult it can be to exit and reenter the market successfully. They don't mean investors should ignore market risk or remain invested regardless of their circumstances. Rather, they reinforce the importance of making investment changes for sound financial reasons instead of short-term predictions.

Source: J.P. Morgan Asset Management, 2026 Guide to Retirement, page 41. Results are hypothetical, exclude investment fees and expenses, and are not indicative of future performance. The S&P 500 is an unmanaged index and cannot be invested in directly.

Investing now may make sense if you're financially prepared, have a long-term investment horizon, and can tolerate market fluctuations. Waiting may be appropriate when you have near-term financial obligations, insufficient cash reserves, or concerns about taking on investment risk.

Consider how these three approaches differ.

Investing Now

Investing available funds gives your money more time in the market and the opportunity to participate in future growth. However, it also exposes you to the possibility of a market decline shortly after investing.

This approach may be appropriate when you have a long investment timeline, sufficient cash reserves, and a portfolio suited to your ability to absorb potential losses.

Waiting to Invest

Holding your money in cash or cash equivalents can be appropriate if you expect to need those funds soon or haven't built a sufficient financial reserve.

However, waiting solely because you expect stock prices to fall introduces another risk: Markets may continue rising, and an attractive entry point may never arrive when you expect it.

Investing Gradually

If you're uncomfortable investing a large amount at once, you may prefer to spread purchases over several months through dollar-cost averaging.

This approach reduces the impact of choosing a single entry date, although it doesn't eliminate investment risk or guarantee better returns.

The right choice depends on why you're investing, when you'll need the money, and how each approach fits your financial situation.

Before deciding whether now is a good time to invest, it's helpful to evaluate the financial factors within your control. Market conditions matter, but consider them alongside your savings, obligations, investment goals, and personal circumstances.

1. Do You Have a Financial Plan?

A financial plan helps establish what your investments need to accomplish and how they fit with the rest of your finances.

Start by considering:

• Emergency savings: Do you have enough accessible cash to cover unexpected expenses? Three to six months of essential expenses is a common starting point, although your needs may differ.
  
• Outstanding debt: Are you carrying high-interest credit card balances or other obligations that should take priority?
  
• Investment goals: Are you building retirement savings, funding education, preparing for a major purchase, or working toward another objective?
  
• Available income: Can you invest without compromising your monthly expenses or other financial responsibilities?
  

These considerations also change with your stage of life. Someone beginning their career may focus on establishing savings habits, while a person nearing retirement may place greater emphasis on portfolio withdrawals and preserving capital.

Our financial planning approach considers your immediate needs alongside your longer-term objectives, helping establish a practical foundation for investment recommendations.

2. How Long Can You Keep Your Money Invested?

Your investment time horizon is the length of time before you expect to need the money. It plays an important role in determining which investments may be suitable.

Short-Term Goals: Less Than Three Years

Funds needed for an upcoming purchase, major expense, or other immediate obligation generally warrant an emphasis on accessibility and capital preservation. Savings accounts, certificates of deposit (CDs), or certain money market investments may be worth considering.

Medium-Term Goals: Three to Ten Years

If you have several years before needing your funds, a combination of investments may be appropriate. The allocation between stocks, bonds, and other assets should account for your timeline and ability to accept losses.

Long-Term Goals: Ten Years or More

A longer investment horizon may allow greater exposure to growth-oriented assets because there is more time to navigate market fluctuations. However, time alone doesn't eliminate risk or guarantee that investments will recover from losses.

For retirement investors, the timeline also extends beyond the date you stop working. Your portfolio may need to support income needs over several decades, making the balance between growth, withdrawals, and risk particularly important.

3. How Much Market Risk Can You Handle?

Investment risk involves more than your reaction to a falling stock market. It includes both your willingness to experience losses and your financial ability to absorb them.

For example, a 20% portfolio decline may have very different consequences for someone investing for retirement 25 years away compared with someone relying on investments for monthly income.

Ask yourself:

• How would a significant market decline affect my financial goals?
  
• Would I need to withdraw money from my investments during a downturn?
  
• Could I remain invested through a prolonged period of volatility?
  
• Does my current portfolio reflect the level of risk I can reasonably afford?
  

At SIM, our investment management philosophy considers clients' financial needs, risk tolerance, and investment objectives. We use ongoing research and analysis to help develop portfolio strategies that reflect both short-term requirements and long-term goals.

Although investing sooner may provide more time for potential growth, delaying new investments can be appropriate in several circumstances.

You Haven't Established Emergency Savings

Without accessible cash reserves, an unexpected expense could force you to sell investments during unfavorable market conditions. Establishing an emergency fund may deserve priority.

You're Carrying High-Interest Debt

Reducing expensive debt can improve your financial position by lowering future interest costs. Depending on the interest rate and your overall circumstances, paying down debt may offer a more immediate financial benefit than taking additional investment risk.

You'll Need the Money Soon

Funds designated for a home purchase, tuition payment, or another near-term expense may be better held in lower-volatility, more liquid investments.

You're Unsure Whether an Investment Is Appropriate

If you don't understand an investment's risks, costs, liquidity restrictions, or role within your financial plan, gathering more information before committing your money is a reasonable choice.

The purpose of waiting should be to address a specific financial need or concern rather than attempting to predict the next market downturn.

Dollar-cost averaging is an investment strategy that involves contributing a fixed dollar amount at regular intervals, regardless of market conditions.

For example, instead of investing $12,000 at once, you might invest $1,000 each month for 12 months.

Because the contribution stays the same, you purchase more shares when prices are lower and fewer shares when prices are higher.

Potential advantages include:

• Less dependence on a single purchase date. Contributions occur across different market conditions rather than at one chosen moment.
  
• A more manageable approach to investing. Regular contributions can make it easier to maintain a consistent investment schedule.
  
• Reduced pressure to predict market movements. You establish a contribution strategy in advance instead of repeatedly deciding when to enter the market.
  

However, dollar-cost averaging also has limitations. If markets rise steadily during the contribution period, investing the full amount earlier may produce better results. Spreading investments over time can also leave a portion of your money uninvested for longer.

For investors who contribute regularly from their paychecks or who are uncomfortable investing a substantial lump sum, dollar-cost averaging may be a practical approach. Its suitability depends on your goals, risk tolerance, and available funds.

Deciding when and how to invest becomes more manageable when you understand how your portfolio supports your broader financial life.

At Strategic Investment Management, our Austin-based fiduciary financial advisors provide personalized investment management and financial planning for individuals and families at different stages of life.

We begin by learning about your objectives, financial responsibilities, and concerns. From there, we develop recommendations informed by your investment timeline, risk tolerance, and financial priorities.

Our Investment Planning Approach

1. Understand Your Financial Situation

We take time to learn about your income, assets, obligations, current investments, and financial objectives. We also discuss your concerns about market volatility and what level of risk may be appropriate for your circumstances.

2. Develop a Personalized Strategy

Using your goals and financial information, we develop a coordinated strategy that considers asset allocation, diversification, and the role your investments play in your broader financial plan.

3. Implement Investment Recommendations

We help put your strategy into action using investment recommendations selected with your objectives and tolerance for market fluctuations in mind. Our investment philosophy incorporates ongoing research and analysis to inform portfolio management.

4. Monitor and Adjust as Needed

Your financial needs will change, and market conditions will continue to evolve. We review your strategy over time and help evaluate whether adjustments are appropriate as you approach important financial milestones.

Our team also works with other financial professionals, including tax and estate planning specialists, when coordination may benefit your broader plan.

Whether you're beginning to accumulate wealth, preparing for retirement, or managing investments after leaving the workforce, our financial planning and wealth management services for individuals and families are designed around your personal circumstances.

No single market condition makes investing the right choice for everyone.

If you have adequate financial reserves, a suitable investment timeline, and a portfolio strategy aligned with your goals, beginning or continuing to invest may be appropriate even when market conditions feel uncertain.

If you're approaching a major expense, carrying expensive debt, or depending on your investments for near-term income, other financial priorities may deserve attention first.

The more useful question is whether your money is positioned to support what you want to accomplish, both now and in the years ahead.

A thoughtful investment strategy gives you a framework for evaluating opportunities, managing risk, and making adjustments as your financial circumstances change.

You don't need to predict the next market move to make an informed investment decision. You need to understand your financial priorities, the risks you're taking, and how your investments can support your goals.

At Strategic Investment Management, we take the time to understand your circumstances and provide guidance grounded in comprehensive financial planning. If you're wondering whether now is a good time to invest, we'd welcome the opportunity to discuss your options.