One of the most common questions I have been getting recently is, “should I be buying right now with the market at an all-time high?” Or, alternatively, “should I sell now and wait for a dip to get back in?”  These can be tough questions.  These can be really tough questions.  So to keep things simple, I typically just reply “yes” to the first and “no” to the second and move on.    Cheekiness aside, those answers don’t stray far from my true beliefs (assuming you’re investing for the long-term).  That’s because these questions deal mostly with market timing, which I’m honestly no better at than anyone else.  The reality is the market has been making new all-time highs for its entire existence, and as long as the US continues to grow over time, it will likely continue to do so well into the future.  Trying to capture the undulations around that upward trajectory has become somewhat of a fool’s errand for me.    

The events of the past couple of months are a perfect example of why trying to time the market can be so hard.  Just a few weeks ago I figured I’d be writing something about rising inflation fears and the subsequent market volatility.  Everything from commodities, to houses, to used cars, were rising in price with no sign of relief.  The concern here was the Federal Reserve would need to step in to keep things under control and that these efforts would result in a sudden slowing of the economy. Therefore, money started to shift away from highly cyclical industries and into large-cap, technology companies that perform better in softer economic environments. 

Fast forward a couple of weeks, however, and the tune has completely changed.  Inflation looks to have eased a bit leading many to believe some of the dramatic initial moves were more transitory in nature.  The Fed has also worked to reassure the public that they are keeping a close eye on the changing conditions and wouldn’t be too quick to modify their current accommodative stance.  Within days, money was flowing back into all the beaten-down sectors and the broader market was hitting new all-time highs. 

As with any of these market gyrations, you would have to be right twice to capitalize on them – once on the way down and then again on the way back up.  The more variables you throw into the mix, the more you begin to realize that trying to play the ups and downs in the broader market is little more than a guessing game.  And I wouldn’t be surprised if there is an entirely different story in play by the time this gets published.  You might be able to get it right a few times, but doing it consistently is very challenging.

For me, focusing on finding great companies is a much more valuable use of my time and resources than worrying about what the broader market is going to next week.  I’m okay knowing I’ll probably never find the perfect entry/exit points, but if I find the company that is good enough to remain relevant ten years down the road, there is a good chance it will be more valuable then than it is today.