Time in the market, not timing the market. Such a cliché is a good reminder that proper investing requires a long-term mindset.
It is easy to get caught up in the here-and-now, the latest trend, or something a “friend told me.” The problem with the here-and-now is that it focuses on the near-term… weeks, months, or a year, and it pulls you away from your more pertinent long-term goals and objectives.
When investing, there is arguably more risk in the near-term than in the long-term. This almost sounds like an oxymoron, but the reality is that near-term returns, such as annual returns, suffer from more drawdowns and worse severity than longer investment horizons. The longer term, as depicted by a 10-year investment horizon, has far more consistent returns that rarely result in a negative outcome. (Admittedly, we are talking about a diversified pool of assets.) In fact, for the past 55 years, only two 10-year periods ending in 2008 and 2009 resulted in a slight negative return.
Here are a few strategies to remain long-term focused.
- Know your goals, yourself, and stay grounded in a disciplined investment process.
Long-term investment success starts with identifying your investment objectives, determining your long-term goals, such as saving for retirement or education, and setting liquidity priorities.
- Try to avoid getting stuck on the sidelines.
Investing comes with the turmoil of the news cycle. Trying to time the market is linked to holding excessive cash waiting for the perfect opportunity that never arrives.
- Be wary of FOMO, Fear Of Missing Out.
In the days of exciting headlines and new trends, it can be hard not to want to jump aboard what appears to be a departing train. If the urge grabs hold, invest a minimal amount in the FOMO trade.
- Remember that volatility is normal, so stay the course.
Declines are a natural characteristic of the market. The market eventually retreats from an overzealous condition. When those times arrive, remain calm and refocus on the long-term.
It wasn’t long ago when many investment professionals claimed double-digit returns would never happen again. Many stated that it was an ‘80s – 90s phenomenon. Yet, 2025 concluded with the eighth consecutive 10-year return in solid double digits. Time-in-the-market was a clear winning strategy over timing-the-market. Maintaining proper perspective is one of the best ways to fulfill your objectives.
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