Another Market Timing Article (Except Not Really)

When "Doing Something" Feels Better Than Doing the Right Thing

I've had the same conversation at least a dozen times in the past few weeks. A client calls, emails, or stops by the office with that familiar tone - part concern, part urgency. They've been reading the headlines, talking to friends, maybe watching a bit too much financial news. And they want to talk about their portfolio.

"I'm thinking we should make some changes," they'll say. "With everything going on right now." Then comes the list: geopolitical tensions, interest rate uncertainty, valuations that seem stretched, political instability, trade policy concerns. The specifics vary, but the underlying message is always the same: the world feels dangerous, and sitting still feels reckless.

I get it. I really do. When you turn on the news and see nothing but reasons to worry, doing nothing feels irresponsible. Surely there's something we should be adjusting, some move we should be making to protect what you've worked so hard to build.

Look, I know what you're thinking. "Here we go, another lecture about staying invested for the long term and ignoring the noise." And yes, there's some of that here. But honestly, if one more blog post telling you to "just hold on" was going to change how you felt when your account balance drops 15% in three weeks, we wouldn't keep having these conversations.

So let's try something different. This isn't really about market timing versus buy-and-hold. It's about something more fundamental: we're measuring success with the wrong ruler.

We've been conditioned to judge our investing success by comparing returns - to the market, to our friends, to some benchmark we saw in the newspaper. But what if the real question isn't "Did I beat the S&P 500?" but rather "Am I still on track to send my daughter to university, retire at 62, and help my aging parents without selling the house?"

The market is a tool we use to reach our goals. It's not the goal itself. And once you understand that distinction, the whole conversation about timing and corrections starts to look different.

The Illusion of Perfect Timing

Think about what you're really asking when you want to sell before "the correction." You're assuming you know three things with certainty: that a drop is coming, when it will arrive, and when it will end. That's not investing - that's fortune-telling.

Market downturns of at least 5% have occurred in 92 out of 98 years since 1928, yet the market has been positive 79% of the time over one-year periods.¹ Yes, drops happen. Frequently. But they're woven into the fabric of long-term growth, not separate from it.

The real trap isn't the correction itself; it's the two decisions you'll need to make perfectly. First, when to get out. Then, when to get back in. Missing just 30 of the best trading days over a 30-year period can reduce annual returns from 8.4% to 2.1%.² And those best days? They often happen right in the middle of the worst stretches, sometimes even back-to-back with terrible days.

But here's the deeper problem: even if you nail the timing, what have you actually won? A higher return number on a statement? That's nice, but it only matters if that higher number helps you do something meaningful with your life.

Your Portfolio Should Reflect Your Life, Not the News Cycle

Here's a different question: instead of trying to predict what the market will do next week or next month, what if we built your portfolio around what you actually need it to accomplish?

Goal-based investing creates a personalized financial strategy that focuses on achieving specific life objectives, measuring success by how effectively it helps you reach your goals rather than by portfolio performance relative to market benchmarks.

This isn't about ignoring risk. It's about defining what risk actually means for you. If you're 45 and saving for retirement in 20 years, a temporary 20% drop is uncomfortable but manageable. If you need the money in two years to help with a child's education, that same drop could derail everything.

The difference isn't the market, it's the timeline. And more importantly, it's the purpose.

When you measure success by reaching goals instead of beating returns, the entire emotional experience of investing shifts. Did your portfolio drop 12% this quarter? That hurts. But if you're still projected to have enough to retire comfortably, you haven't actually failed at anything. You've just experienced normal market behavior while staying on course.

Finding Your Emotional Balance Point

There's a concept I find helpful: your "equipoise point." It's that sweet spot in your asset allocation where you're neither paralyzed by fear during a downturn nor consumed by regret during a rally.

When markets climb, you're pleased with your gains but not kicking yourself for not being more aggressive. When they tumble, you feel the sting but also have the stability and dry powder to rebalance. Maybe even to invest more at lower prices. You're balanced. Not comfortable necessarily, but balanced.

For some people, that's a traditional 60/40 split between growth investments and more stable holdings. For others, it's 75/25 or 50/50. The number matters less than the feeling. Can you sleep at night? Can you stick with the plan when your neighour is bragging about their tech gains or when headlines scream about impending doom?

And critically: can you keep your focus on what matters? Your neighbour's 40% return last year is irrelevant if your portfolio got you closer to your goals and theirs got them closer to an ulcer. We're not playing the same game.

The Real Conversation We Should Be Having

Instead of "Should I get out before the crash?" let's talk about:

By breaking down financial goals into actionable steps and aligning risk levels with each goal's time horizon, goal-based investing helps protect critical milestones while alleviating the anxiety that often accompanies market volatility.

If you're heavily concentrated in one area - whether that's U.S. growth stocks, Canadian banks, or anything else - that's not a market-timing problem. That's a diversification problem. And that we can fix without trying to guess what happens next Tuesday.

If you can't answer the question about which life plans would be derailed, that's a different kind of problem. It means you're investing without a clear destination. You're just accumulating returns and hoping they'll eventually be enough. That's not a strategy, it's anxiety with a brokerage account.

What I Actually Recommend

First, get clear on what you need your money to do. Not what you hope it might do, but what it must do. Separate your essentials from your aspirations. Give each goal a timeline and a price tag.

Next, structure your portfolio in layers. Stable, income-generating holdings for near-term needs and peace of mind. Broader market exposure for long-term growth. Maybe some international diversification to smooth out the ride. Each layer serves a purpose beyond "generating returns."

Then, and this is the hard part, commit to leaving it alone unless something fundamental changes in your life, not the market. If your daughter decides not to go to university after all, that's a reason to restructure. If some talking head says the market is overvalued, that's Tuesday.

Because here's the truth: the cost of waiting for the perfect moment to invest typically exceeds the benefit of even perfect timing. The best time to have the right portfolio is before you need it, not after you've successfully dodged a crash that may or may not come.

But more importantly: chasing perfect timing keeps you focused on the wrong scoreboard. You're watching the market's performance instead of your progress. You're comparing your returns to indexes instead of measuring against your actual finish line.

A Different Way to Keep Score

The market will do what it does. It always has. Our job isn't to outsmart it. Our job is to use it as effectively as possible to fund the life you're actually trying to live.

That means checking progress differently. Not "Did I beat the market this quarter?" but "Am I still on track to retire at 60? Can I still help my kids with their first home? Will that sabbatical year still be possible?"

If the answers are yes, then who cares if the market is up 25% and you're only up 18%? You're winning at the game that actually matters.

And when the next wave of uncertainty hits, because there will always be a next wave, you'll be ready. Not because you predicted it, but because you built something designed to survive it while keeping you pointed toward what you're actually trying to accomplish.

That's not exciting. It won't make for great cocktail party conversation. You won't have a clever story about how you got out at the top. But you will have something better: a clear path to the things you actually care about, regardless of what the market does along the way.

And honestly? That's the only return that really matters.

This document is provided as a general source of information and should not be considered personal, legal, accounting, tax, or investment advice, or construed as an endorsement or recommendation of any entity or security discussed. All investments involve risk, including the potential loss of principal. Leveraged ETFs and other complex investment vehicles may not be suitable for all investors and should only be used with a full understanding of their risks. Asset class performance varies over time, and diversification does not ensure a profit or protect against a loss. Every effort has been made to ensure that the material contained in this document is accurate at the time of publication. Market conditions may change, which may impact the information contained in this document. All charts and illustrations in this document are for illustrative purposes only. They are not intended to predict or project investment results. Individuals should seek the advice of professionals, as appropriate, regarding any particular investment. Investors should consult their professional advisors before implementing any changes to their investment strategies. The opinions expressed in the communication are solely those of the author(s) and are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. Mutual funds and other securities are offered through De Thomas Wealth Management, a mutual fund dealer registered in each province in which it conducts business and a member of the Canadian Investment Regulatory Organization (CIRO).