Why do we all want to time the market when it is hard?

Every investor has had this thought: “If only I’d bought at the bottom… and sold at the top.” Market timing is seductive. The idea that we could step in at exactly the right moment, sidestep losses, and outperform everyone else is hard to resist—especially during periods of heightened volatility.

At Tricio, we are strong advocates that long-term investors should focus on time in the market, not timing the market. Yet even experienced investors and advisers know how difficult it is to stick to that principle when headlines turn alarming and markets swing sharply.

So why do so many of us still try to time the market—even when the odds are stacked against us?

The Illusion of Control

At its core, market timing is about control. We all want to feel in charge of our financial future. When markets fall because of events we cannot influence—geopolitics, central bank decisions, unexpected headlines—doing nothing feels deeply uncomfortable.

That discomfort is often magnified when someone else claims to have “called the bottom”. A friend boasting at a dinner party about a perfectly timed trade can make staying disciplined feel like failure, even when it isn’t.

In volatile markets, action feels better than inaction. Unfortunately, that instinct often works against long‑term investment success.

The Need to Be Different

There is also a powerful social element at play. In Manias, Panics and Crashes, Charles Kindleberger observed that bubbles tend to form when people cannot stand watching their neighbours get rich. A similar dynamic often appears during market downturns. Investors don’t just fear losses—they fear being worse off than others. We want to stand out. We want to be the person who made money when everyone else was losing it. Market timing promises exactly that. Delivering it consistently is another matter.

Why Wanting It Isn’t Enough

Popular self‑help culture promotes the idea that determination guarantees success. In investing, this is a dangerous myth.

You cannot simply decide to become a successful market timer and expect it to happen. Even with experience, timing markets requires:

• The right mindset (which can be learned)

• The right temperament (which often cannot)

Let’s be honest: market timing is genuinely hard, even for professionals.

Loss Aversion and Poor Risk Decisions

Behavioural finance adds another layer of difficulty. Loss aversion—the tendency to feel losses more painfully than gains—leads many investors to sell winning positions too early while holding onto losing ones for too long. This is not a failure of intelligence; it is a failure of position risk management.

Many retail investors focus heavily on tools such as technical analysis and entry signals. Far fewer spend enough time mastering risk sizing, exit discipline, and downside control—the elements that matter most over time.

Quick wins are appealing. Discipline and patience are not. Markets reward the latter.

The Reality of Costs and Execution

Even if you get the timing right, execution is another challenge. Market timing typically involves frequent buying and selling, which increases transaction costs. For retail investors, these costs can be significant enough to materially erode returns.

Execution speed also matters. Consider the one‑minute price movements of the Vanguard FTSE 100 ETF on 23 March. Markets initially fell following President Trump’s comments about escalating attacks on Iranian power infrastructure. Shortly after 11:00am UK time, he shifted his position again—and prices rebounded sharply, rising nearly 2.7% within minutes (see chart below — source: Interactive Broker).

Ask yourself honestly: as a retail investor, how likely is it that you could have bought at precisely the right moment? Hedge funds and algorithmic trading firms may capture moves like this. Most ordinary investors will not. 

Should Anyone Try to Trade Short‑Term?

Does this mean short‑term trading is always a mistake? Not necessarily. Some of us do possess the temperament, resilience, and discipline required. But even for them, success depends far more on risk management and mindset than on predicting short‑term market moves.

For most investors—and most clients—the evidence still strongly favours patience, diversification, and staying invested over the long term. Time in the market remains one of the most reliable advantages investors have.

James Chu, CFA

Head of Investment Solutions