If you’re investing for the long term, history favors getting started now — whether that’s investing all at once or easing in with a plan. So what really matters isn’t what the market is doing today, it’s your timeframe.
That said, here’s the context most people are wrestling with. Markets are at all-time highs and seem to be hitting new highs fairly regularly. And naturally, people ask, “Is this really a good time to start investing, or should I wait for a better time?”
Here’s what the data shows. For long-term investors, two approaches consistently outperform waiting:
investing a lump sum now, or dollar-cost averaging over a short, defined period.
Vanguard studied nearly a century of market history and found that lump-sum investing outperformed dollar-cost averaging about two-thirds of the time. And both approaches beat holding cash while trying to guess when the “right time” might show up.
The challenge with waiting is simple. There’s no clear, obvious moment that signals the best time to invest. The periods that end up being great opportunities only look obvious in hindsight. In real time, they usually come with volatility, bad news, and plenty of reasons to hesitate.
Which brings us right back to the beginning.
If your goal is long-term growth, your timeframe matters far more than today’s headlines.
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