When markets get volatile — like they are right now — it’s natural to think about pulling your money out before the next dip. The idea is simple: sell high, wait out the chaos, and get back in once things settle down.

‍

In theory, that sounds like a great plan, right? In reality, it’s almost impossible to time correctly. Markets don’t move in straight lines, and they rarely react to news in ways we expect. The truth is, no one rings a bell at the top or bottom. By the time you know the market has peaked or bottomed, the move has already happened. The stock market is an infinite game, not a finite game.

‍

That’s where most investors get hurt. History shows that the biggest up days in the market have often clustered around the worst down days. So if you’re on the sidelines trying to avoid losses, you’re likely missing out on the recovery too — and those missed days can cost you big time. Take a look at the data:

‍

Morningstar recently put out its annual “Mind the Gap” report, which tracks how investor behavior impacts returns. Over the 10 years ending December 31, 2023, the average dollar invested in U.S. mutual funds and ETFs earned 6.3% per year — that’s 1.1% per year less than the average fund’s return. Why the gap? Poor timing decisions: buying high, selling low, trying to time the market.

‍

That 1.1% drag adds up. Over 15 years, that’s roughly a 15% shortfall in growth. Not because of bad investments — but because of bad timing.

‍

What's the best way to invest when the market gets shaky? It really depends on your personal finances, how long you plan to invest, your goals, how much risk you can handle, your retirement needs, and even your estate plans. For instance, someone nearing retirement in a few years will handle market ups and downs differently than a young investor just starting out. A smart move is to team up with a trusted wealth manager to create a diversified portfolio that fits your situation and can ride out market swings over time.

‍

Here’s the bottom line: the biggest risk to your portfolio isn’t short-term market volatility — it’s not being invested according to your goals and objectives. Markets recover. The key is to be positioned so you don’t have to make emotional decisions when things get bumpy.

‍

At GatePass Capital, we build portfolios designed around long-term goals, not short-term noise — with diversification, risk management, and access to private market opportunities when appropriate. If you're feeling uneasy about your portfolio or wondering how to invest through this cycle, we’re here to help. Please reach out to learn more.

‍

‍

Unless otherwise indicated, commentary on this site reflects the personal opinions, viewpoints and analyses of the author and should not be regarded as a description of services provided by GatePass Capital or its affiliates. The opinions expressed here are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual on any security or advisory service. It is only intended to provide education about the financial industry. The views reflected in the commentary are subject to change at any time without notice. While all information presented, including from independent sources, is believed to be accurate, we make no representation or warranty as to accuracy or completeness. We reserve the right to change any part of these materials without notice and assume no obligation to provide updates. Nothing on this site constitutes investment advice, performance data or a recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Investing involves the risk of loss of some or all of an investment. Past performance is no guarantee of future results.

‍