Market timing has always held a certain allure. The thought that you can predict the perfect moment to buy low and sell high feels logical, even responsible. Yet decades of real-world evidence show that even the most sophisticated investors—including seasoned institutional managers—struggle to do this with any consistency. The truth is simple: timing the market rarely works, and relying on it often costs investors far more than they realize.

Plan as If You’re Investing at the Worst Possible Time

A disciplined investor approaches every decision with a single mindset: What if I’m buying at the worst possible moment?This isn’t pessimism—it is good planning. Investing is not gambling. It is a long-term, strategic process measured against the timeline when you expect to need the money, not the noise of the day you enter the market.

Evaluating an investment means looking beyond short-term returns and asking how it performs in strong markets and, more importantly, how it behaves across a full market cycle, including a crash like 2008. Long-term resilience matters more than temporary performance.

Why Maximum Drawdown Matters More Than You Think

This is where understanding maximum drawdown becomes critical. Drawdown measures how deeply an investment can fall during a severe market decline, and recovering from losses takes far more effort than most investors realize.

A 10% decline requires an 11.1% gain to break even; a 20% drop requires a 25% recovery. A 50% drop—something Charlie Munger often warned investors about—requires a full 100% gain just to get back to zero. This is why risk management, not market timing, forms the true foundation of building lasting wealth.

Time in the Market Beats Timing the Market

The old saying remains true: it’s time in the market, not timing the market, that drives long-term returns. Market recoveries often arrive suddenly and without warning. Historically, the majority of the stock market’s best days—78% of them—occur during a bear market or within the first two months of a new bull market.

These are the times when investors feel the worst, when the headlines are bleakest, and uncertainty is overwhelming. Yet these are often the very days that fuel long-term growth.

Missing even a handful of these key moments can devastate performance. Missing the 10 best days over the last 30 years would cut total returns in half, and missing the best 30 days would reduce returns by more than 80%. Investors who attempt to dodge downturns often end up missing the recoveries that create real wealth.

Volatility Is Normal—and Necessary

Volatility, despite how unsettling it feels, is normal. It is woven into the structure of global markets and shaped by economic cycles, geopolitical pressures, innovation, inflation, and simple human emotion.

What matters is not trying to avoid volatility entirely, but ensuring your investments are managed intelligently through it.

The Value of Active Management

This is where disciplined, active management plays a powerful role. A thoughtful approach can help investors navigate turbulence, make tactical adjustments, manage downside exposure, and position portfolios to take advantage of opportunities that often appear during moments of fear and uncertainty.

Brookwood’s approach is built around these principles—reducing the pain of downturns while setting portfolios up for strong recovery.

History Favors the Long-Term Investor

History continues to show that long-term investors benefit from staying invested. Markets have demonstrated resilience again and again, recovering from crises, recessions, wars, and global shocks. Those who remain disciplined and avoid emotional decision-making typically achieve the strongest outcomes.

Why Holding Cash Isn’t the Solution

Holding cash, though tempting in uncertain times, is rarely a long-term solution. Cash can feel safe, but it steadily loses value to inflation and does not participate in market recoveries. While it may help soften short-term losses, it cannot generate the growth needed to fund long-term goals such as retirement, education, or wealth building.

A well-diversified, actively managed portfolio is designed to weather volatility, outpace inflation, and support long-term success.

Final Thought

Investing is not about predicting the market’s next move. It is about staying disciplined, staying invested, and structuring your strategy to withstand full market cycles—not just the good years. Market timing fails because markets are unpredictable, but long-term, strategic, actively managed investing has continuously proven its value.

When you invest with the mindset that you might be entering at the worst possible moment—and design a plan built to thrive even under that assumption—you give yourself the strongest possible chance of success, no matter what the market does next.