The Unluckiest Market Timer I Know Made Another Poorly Timed Trade

The stock market is a fickle beast, and even the most seasoned investors can find themselves on the wrong side of a trade. For some, it's a matter of bad luck; for others, it's a lesson in the futility of market timing. I, for one, fall into the former category. Despite my best efforts to stay informed and make rational decisions, I seem to have a knack for buying at the top of the market. It's a frustrating experience, but one that offers valuable insights into the nature of investing and the importance of a long-term perspective.

On February 19, 2025, I made what I thought was a prudent decision. I had some extra cash from my 2024 tax returns and decided to contribute more to my self-employed 401(k) plan. I transferred the funds and added to my S&P 500 index fund position. Little did I know that this would be the day the S&P 500 touched a record high before rapidly tumbling into a correction. It was a classic case of buying at the top, and I found myself in the midst of a market downturn.



This wasn't the first time I had experienced such a misfortune. In late 2015, I made a lump sum purchase into an S&P 500 index fund, only to see the market enter a 14% correction. Similarly, in late 2021, my purchases coincided with the market entering a bear market, which saw the S&P fall 25% before bottoming in October 2022. It seems that I have a peculiar talent for picking the worst possible times to invest.

But here's the thing: despite these poorly timed trades, I've managed to come out ahead in the long run. The S&P 500 is up about 170% since my late 2015 purchase and about 20% since my late 2021 and early 2022 purchases. This is a testament to the power of time in the market. As Paul Hickey of Bespoke says, "Time heals in the markets." The key is to stay invested and ride out the volatility, no matter how uncomfortable it may be.



The lesson here is clear: market timing is a fool's errand. Even the most astute investors can't predict the market's movements with any degree of accuracy. The best strategy is to stay invested for the long term and let time work its magic. This doesn't mean ignoring market trends or economic indicators, but rather understanding that short-term volatility is a natural part of the investing process.

In conclusion, my experience as the unluckiest market timer I know serves as a reminder of the importance of a long-term perspective in investing. It's easy to get caught up in the day-to-day fluctuations of the market, but the real gains come from staying invested and letting time do its work. So, the next time you find yourself tempted to time the market, remember my story and the power of time in the market.

Ask Aime: Why do I consistently time the market poorly, even after experiencing long-term gains?