The Problem with "Wait and See"

April 12th 2019: the S&P 500 closed at 2907, a whisker off the all-time high of 2930 on September 20th 2018.  Between September and today, the market took a quick dive and a subsequent quick recovery.  It’s amazing how quickly the narrative can change.

No one could have called it.  As Nick Murray says, we never know when it will turn, only that it will.

For those who were invested and stayed invested, the last quarter of 2018 was what we might call a ‘non-event’. 

The problem comes for those who have cash and are not yet invested (or it comes even more acutely for those who were invested but didn’t stay invested).  When the market is going down it’s easy to rationalise the “wait and see” mindset.  “Now is definitely not a good time to get in.  I think I’ll just wait and see what happens.”

The problem is that waiting is never a plan.  It’s an impulse.  And what are you wanting to see?  If it’s that the world is safe and secure and certain, you will never see.  You will be waiting forever for that train to come along.


It seems to me that “wait and see” can only lead to one thing.  Regret.  Now that we are (almost) back at the high, the regret of not having taken the plunge sometime late last year or early this year starts to hit.  What if we never see those prices again?  (we may or we may not). 

Someone (I am not sure who) once referred to trying to pick the right time to get into the market as psychological warfare.  It’s such an apt description.  Regret if I get in and it goes down, regret if I don’t and it goes up.  Argh! 

The thing to keep in mind is the time-frame over which you will feel regret.  The old adage ‘time heals’ is true in many aspects of life.  When it comes to investing, it doesn’t hold true.  Over time, not being invested leads to more and more regret because you watch the thing you don’t own but know you must own, get more and more and more expensive.  That can never feel good.

If you think the market’s “too high” wait ’til you see it 20 years from now.
— Nick Murray

It’s why I almost always tell people that the right time to invest is the day you have the money to invest.  We can’t build a plan around anything else.