Being In The Long Game

Every day, there's a new headline: Is this the top? Is this the bottom? Is this recession real? Is there going to be a recession? Should you get out now?  Today, we're talking about market timing. Being disciplined, rebalancing, having a plan, not letting ourselves get emotionally wrapped up in our investments is what works over the long term. Enjoy the episode. Thanks for listening.

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Transcript

Wiser Financial Advisor – Being in the Long Game

Hi Everyone, and welcome to the Wiser Financial Advisor podcast, where we get real, we get honest, and we get clear about the financial world and your money. This is your host, Josh Nelson, Certified Financial Planner, founder and CEO of Keystone Financial Services. Let the financial fun begin! 

Recently, at the end of 2025, in a recap of an article “Streetwise” in the Wall Street Journal, author James McIntosh said that markets were assailed by a trio of disruptive forces this year. We're talking 2025, yet investors were rewarded for doing nothing. If you owned US stocks at the start of the year, you made good money. If you owned foreign stocks, even better. If you held industries, you did well. If you parked in cash, the yield stayed high. Doing nothing is the key here—but doing nothing was hard while tariffs, loss of trust in America, and artificial intelligence whipsawed portfolios. 

Today, we're talking about market timing. In the last 26 years of my career of being an investment advisor, I've experienced ups, downs, crises, manias, all kinds of crazy stuff that's happened. But one thing I've always noticed is that being in the game long enough is really what matters. So, if you've been watching markets for any amount of time, you know how loud the noise can get. That also tells you we may do best when we don't pay attention. In a lot of cases, we pay too much attention.

Every day, there's a new headline: Is this the top? Is this the bottom? Is this recession real? Is there going to be a recession? Should you get out now? Think back to the pandemic, think back to the financial crisis, or the Great Recession back in 2008, 2009. That's what we're talking about today, the idea of market timing. My message is simple : Trying to time the market doesn't work! What does matter and what actually moves the needle for most investors is being in the game long enough while having a good plan. 

The key here is not just staying in the game, but making sure you've got a plan and that you're disciplined as an investor. The reason market timing is so tempting is because we want control. That's just human nature, right? We want to feel like we're in control, and we don't like uncertainty. We want to fix things if something seems wrong. If we look at our balances or our statements and we see certain assets or maybe even all of our assets going down in value temporarily, we want clear answers. It’s human nature to want to do something about it, because it feels like that's the right thing to do. But as Mr. McIntosh said in his article, those who did nothing last year, even with all the craziness and ups and downs, ended up having an OK year. The S&P 500 ended the year about 15% positive, which is certainly well above its long-term average. 

Over the last 100 years, the stock market average as defined by the S&P 500 has been about 10% a year. But of course, it’s rarely exactly 10%. It's going to be 15%, then 20, then negative 10, negative 20, even negative 50. Yes, some markets have been so bad, that from the top to the bottom there was a loss of over 50% of market value. It's understandable to feel like something needs to be done right away in those situations, but it's also a trap to get sucked in emotionally during those times. 

The market doesn't really reward certainty. That's why you're being compensated so much better if you invest. Things like stocks, for example, and real estate, have no guarantees versus if you went to the bank or credit union, got a CD, put it in the savings account, had FDIC insurance, or bought treasuries. Those things have overt guarantees from somebody, at least the federal government if nothing else, and so they seem like a really safe place to be. But in the long run, we know that that will be pretty tough from an inflation standpoint, because there's a price for that safety. There's a price for that certainty. 

Let's talk about why market timing fails. Here's the practical problem: To get it correct and time the market successfully, you have to be right twice. You have to know when to get out and when to get back in. That's incredibly hard to do. I mean, think about it. What are the odds of you or me or anybody knowing when to get in and out? It’s highly unlikely that we're going to get that right and get it right more than once. Most people get one right. It's possible. Back in the financial crisis or back in the dot-com crash, I know people, and you do too, who got out, maybe not at the very top before things dropped, but they got out. They felt really smart for a while. It felt like they were saving all this money. But my question is: When did they get back in, if they ever did? I know people that got out during the financial crisis as stocks were dropping. and they might have missed out on some of the drop. Maybe things got even worse after they sold, and so they felt really good about that. But in most cases, people never got back in, or when they did get back in, it was years later after the stock market had recovered most of its losses. 

We know that the first rule of investing is buy low and sell high. That's just common sense. We know that intellectually—but emotionally, the stock market wants us to do the opposite. And the media doesn't help, because they're being paid to get you to click and get your eyeballs on their articles and products and things like that. Often, even financial media will tell you to do exactly the wrong thing, at least for a patient long-term investor. 

Many of you know that Warren Buffett recently retired from his CEO role at Berkshire Hathaway. Without a doubt, most of us would agree that he's one of the most successful investors of all time, at least over the last 100 years or so. Warren Buffett has said that the stock market “is designed to transfer money from the active to the patient.” I think that's a powerful statement about human behavior and markets. And here's the data to back that up. Dimensional Fund Advisors' Research found over the last 100 years or so, that over any one-year period, stocks historically have about a 75% chance of being up and a 25% chance of being down. That's over any one-year period. That's not bad odds at all. Over every rolling five-year period, the chance of a negative return falls to around 10% or less. Now we're at 90/10, 90% chance of up, 10% chance of down. Over 10 years, Dimensional found that over any rolling 10-year period, negative returns become relatively rare. Roughly 6% of the time, you could be negative over any 10-year period of time. As the horizon stretches out to 15, 20 years, the chance of negative returns falls close to zero at that point. I think it's only happened once. Back if you were investing in say, 1929, if you invested at the worst possible time, when the market was very high, right before the crash and the Great Depression. 

Those numbers make an important point. As your time horizon increases, the odds of the market rewarding you instead of punishing you, dramatically improve. And of course, we can't say guarantee, we can't say promise, but it is probability. Those are real numbers. We didn't just make those up. Those numbers give us more evidence that gosh, being in the game long enough actually makes a big difference. 

I've been doing this for 26 years. I've been an investor for longer than that but basically started as a financial investment advisor right out of college. I didn’t have a lot of money before that, but I invested in stocks and I also invested for other people as well over the last 26 years. I'm convinced that being in the game long enough is really what matters. So the real key is the time in the market, not market timing. 

What is your true time horizon? In shorter windows of time, like months, quarters, even a couple of years, returns can be all over the place. That’s something that you've got to prepare yourself for, kind of like getting on an airplane. You know that at some point during the flight, you're probably going to have some turbulence. Maybe it's just during the landing. In Colorado, you almost always have turbulence when landing, because of the choppy air. That's analogous to the volatility in the market. We would call it risk because you don't know exactly what's going to happen. But within those longer time periods like 10, 15, 20 years, the volatility noise really does smooth out, and the probability of having a positive return goes way, way up. That's why long-term investing works, why you want to be in the game long enough. 

And isn't that great? It's kind of freeing in a lot of ways, in that as long as we're diversified and we've got a good asset allocation, it didn't cost us anything. All we had to do was just stay put. Should we have a strategy? Does it help to have a great investment advisor that's helping guide the ship? Absolutely. But really, most of the short-term chaos kind of falls away as time goes on. In fact, most of the time, when we talk about past crises or things that made the market go down a lot in a short period of time, most people forget about it.

We saw about a 20% drop last April, in a short amount of time. That was when tariffs were announced. And of course, things were way down for a while. Most people don't even remember that now, because we ended up having a good year. And my family traveled by plane and landed in Hawaii. We had a great time on vacation. Most of the time, you probably don’t remember your plane flight, even if it was turbulent. 

Let's talk about asset allocation and being disciplined. This isn't just blindly buying and holding. I don't believe in that. I don't believe you just “set it and forget it” with a portfolio, and then never look at it again. It’s about being thoughtful, really being diversified and having a thoughtful, disciplined plan on how the portfolio is constructed. Some of that is anticipating that the market will zig and zag, and having different asset classes, probably not all US stocks, or all international stocks, or all Bitcoin, or all one thing. Being under-diversified is a potential hazard. We saw this happen with Enron employees, where they had all their money in one company stock. Really sad things happened, where employees were walking out with boxes of their stuff. When the company went broke, the stock went to zero, which meant that not only did those employees lose their jobs and their benefits, but in a lot of cases, because the stock had done so well, people had put all the money in their 401k into that one stock. We never do that. We don't put all our eggs in one basket. 

All of our grandmothers told us at some point: Don't put all your eggs in one basket. But it’s also important to not react to every headline. What does it mean then, to be disciplined? It means that at the very least, we rebalance. We make sure that things don't get out of whack regarding risk. We don't end up with too much money in one area. We stay diversified. Diversification costs you nothing these days. There are hardly any trading fees anymore, so if you buy 100 stocks or one stock, it doesn't make you have to pay more because you bought 100 stocks or had 100 funds. Staying diversified really doesn't cost you anything. And staying aligned with your plan, having somebody guiding the ship, having somebody who's been through a lot of markets and has a lot of training. 

Working with a Certified Financial Planner, although not a guarantee of anything, is the gold standard in our industry. It means that not only is the person experienced and educated, but also multidisciplined. They're not just an investment advisor. They're somebody that can help in the other areas of your financial life, such as stuff with your kids, stuff with college education, planning for Medicare and Social Security, helping with estate planning and tax planning. And of course, they're also going to be working with other professionals, other experts in those areas as well. Your Certified Financial Planner probably is not also doing your taxes. In some cases, they might, but more than likely a tax expert will be pulled into the mix, maybe an estate attorney, maybe other experts as well. 

I'm talking about myself too, right? Because I'm also an investor, and my wife's an investor. So, all of our behavior as in investors is what ends up mattering the most. The toughest part of investing really isn't picking the right stocks or timing. It isn't even forecasting outcomes, because we know we can't do that. But it is about our behavior. 

Risk really isn't the market declining. It really isn't the turbulence. Planes don't crash because of turbulence, or so I'm told, but turbulence is uncomfortable. If you've been an investor for any length of time, you can think back on what market turbulence felt like. Maybe it was just last year when we saw the market drop because of fear of tariffs and the impact on the economy and inflation. Maybe it's further back, during hyperinflation we had in 2021, 2022, as we were coming out of the pandemic. Maybe it was the pandemic itself, when we saw the market drop about 30% within just a few weeks as the economy shut down. Maybe it goes back to the financial crisis or the dot-com crash or Black Monday back in 1987, for those of you who have been invested that long. 

If you think back to those times, think about, “Gosh, if I had gotten out, would I have gotten back in?” It isn’t likely that you would have gotten both of those decisions right. So the best investors really aren't brilliant. It’s all about being disciplined. It's about being consistent and sticking to the plan when it counts. Another of my favorite quotes from Warren Buffett: “Someone is sitting in the shade today because someone planted a tree a long time ago.” I think that's the heart of investing—having the perspective that if you want a tree, you need to go into it knowing that this is for the long run. We’re not digging the tree up every 5 minutes. That will just kill it. It's never going to grow that way. You'll never see a tree thrive if you continue to dig up the roots or try to move it around the yard or something like that. The heart of investing is having that long-term perspective, knowing that the answer is not headlines or watching the market or watching the financial media enough. It's not even about forecasts. 

Of course, this time of year, early 2026, there are a lot of forecasts. That's because even the smartest people could be getting paid to give a forecast. Here at Keystone, we have a forecast, too. Ours is a little different in that we're not trying to predict what's going to happen exactly, but we are being thoughtful of the environment that we find ourselves in. And sometimes that will change how we invest. It may change how you're invested as an investor. Risk is a huge part of that too. Each person's own risk tolerance is important, which is why we want to talk about that with you. But really, this is about patience over time. It's about doing a hard thing consistently.

Going back to the “buy low and sell high” rule of investing—that is something we don't want to do without thinking about it. We don’t want to be emotional about it. Sure, after we've seen our portfolio drop 20, 30%, it doesn't feel good to put more in. It doesn't even make sense logically, right? Why would I do that? I'm losing all this money. But the reality is, that those are the opportunities. Historically, those have been the best opportunities to invest—when everybody wants to sell, and everybody else is selling and running for the exits. If they went in and bought at that time, they’re buying low. You are gaining the opportunity of buying low and then selling high on the other end of things. That's hard to do too, because it could be a year like last year where AI-related stocks were going through the roof. Sometimes people have a hard time selling those. So being disciplined, rebalancing, having a plan, not letting ourselves get emotionally wrapped up in our investments is what works over the long term. 

The whole point here is that when you let time work for you, the noise fades, and volatility becomes background static. You're probably not going to remember it anyway in the long run. The market does what it has done historically, which is reward those who stay invested long enough. That's key. You may not enjoy the turbulence, but you know that it’s part of the ride. That's part of the price that you pay to get to where you want to get. 

Have a great week and God bless.

Thanks for listening to the Wiser Financial Advisor Podcast. I hope this episode resonated with you. Please share it with coworkers, friends, family that might need a reminder that timing the market doesn't work, being in the market for the long run, being disciplined makes the most sense, and having a partner that you trust, having a fiduciary. 

We love feedback and we'd love it if you would pass it on to me directly at josh@keystonefinancial.com . Also, please stay plugged in with us, get updates on episodes, and help us promote the podcast by rating us five stars and subscribing to us at Apple Podcasts, Spotify, or your favorite podcast service. 

The opinions voiced in the Wiser Financial Advisor show with host Josh Nelson offer general information only and are not intended to provide specific advice or recommendations for any individual. To determine what may be appropriate for you, consult with your attorney, accountant, financial or tax advisor prior to investing. Investment advisory services offered through Keystone Financial Services, an SEC registered investment advisor.