The JSE is currently at all time highs. The US market is also at all time highs. If you have some cash, is it worth waiting for a pullback before investing?
This was the strategy of the past 2 years that hasn’t really worked out. The year 2023 will go down as the year of the most widely anticipated recession that never happened.
Remember all that debate over a hard or soft landing following the rapid increase in interest rates across the world to stem inflation? Well, while we were waiting for the recession to happen, the markets steamrolled ahead and produced some of the best returns in decades.
The chart below shows that since 2023, the local market is up 30% and the US market is up 76% (in ZAR).
Chart: JSE and S&P 500 performance since 2023
So much for having waited in cash generating 8% per annum and getting taxed at your marginal tax rate. That didn’t quite work out.
There’s a common temptation among investors to wait for the “perfect” moment to invest. Maybe it’s waiting for a market correction, a more favourable exchange rate, or the resolution of political uncertainty. The problem? The perfect moment rarely arrives, and at the end of the day, all these so-called predictions are just guesswork.
We don’t know what is going to happen.
Market timing feels rational, but it’s really just speculation.
Investors who sit on cash waiting for the right entry point often find themselves trapped in a cycle of hesitation—when markets fall, fear keeps them out; when markets rise, they worry about overpaying. Meanwhile, long-term investors who consistently add to their portfolios, regardless of short-term market conditions, tend to come out ahead.
Time in the Market Beats Timing the Market
Research has repeatedly shown that missing just a handful of the market’s best-performing days can significantly reduce long-term returns. The challenge is that these strong up-days often follow periods of volatility—exactly when cautious investors have moved to the sidelines.
Instead of trying to guess when to buy or sell, successful investing comes down to three key principles:
- Consistent contributions – Adding to your investments over time smooths out short-term volatility and benefits from compounding.
- A well-diversified allocation – Spreading investments across geographies and asset classes protects against localized risks.
- A clear investment framework – Understanding why you’re investing helps you stay the course during market swings.
The Best Investors Focus on Process, Not Predictions
At the end of the day, wealth is built through patience, not by perfectly timing the next downturn or recovery. The investors who achieve financial independence aren’t those making lucky calls on market moves—they’re the ones who commit to a structured investment strategy and stick with it.
If you’re holding onto cash waiting for the “right time,” it might be worth reconsidering. The best time to invest? When you have the money and a plan.
