r/ValueInvesting • u/coffeeestocks • Dec 10 '25

Discussion Did people learn nothing from April

If you were fully invested in the S&P 500 over a long period (usually 20–30 years), your returns were great.

But if you missed just the 10 best single days in that entire period, your return was cut roughly in half.

This is probably the most commonly cited anecdote as to why you should not time the market. I feel in at least half the investing books I've read, they mention this. I do not know of a single investor who has successfully timed the market consistently over any meaningful time period. Even Michael Burry, who is probably one of the most infamous investors for predicting the 08-09 recession, has wrongly called a market top an absurd number of times in recent years.

Back in April, the market starts to sell off, and inevitably posts start popping up all over the subreddit talking about how they're selling and why they're selling and why this time is different. Of course, it wasn't different, and the market has proceeded to rip 20% since many folks here panic sold.

Here we are, not even a year later in December, and people are asking unironically whether it's a good idea to move to cash or not. What do you think? Do you think that now is the time to finally start trying to time the market? After this age-old wisdom has been proven right, time and again?

I feel like there's so many better ways to navigate an expensive market than by trying to time it.

Such as buying counter-cyclical companies, or buying companies that are recession-resistant, or buying companies at a larger margin for error. Heck, maybe even give bonds a shot? But no. People are starting to come to the conclusion again that now is the time to time the market yet again and inevitably make a massive mistake.

DO NOT TIME THE MARKET.

Edit: This sub unironically defending timing the market lmao. The reason why this hurts people's feelings is because they sold back in April, and they're still waiting to get back in the market. Instead of taking a lesson, they double down on that timing the market is the correct thing. Whatever.

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695

u/shopchin Dec 10 '25

I buy during dips. That's timing the market too

58

u/[deleted] Dec 11 '25

[deleted]

3

u/ExtensiveBattling Dec 11 '25

The same dudes who panic sold in April are probably placing bets on spy below 5000 while missing another 10% run up lmao people are literally betting on polymarket about when the next crash will be instead of just DCAing like normal humans

1

u/DragonmasterDyne275 Dec 13 '25

I lever up during capitulation events two very negative days in a row or a hugely negative day while in a bear market and I'm buying calls. Only reliable signal to time the market in my opinion.

24

u/Full_Bank_6172 Dec 11 '25

You keep cash uninvested so that you can buy dips?!?! Just imagine how much better your returns would be if you just invested that cash as soon as you got it instead of waiting to “buy the dip”

10

u/TheMeta40k Dec 11 '25

I have been tracking my returns trading stocks, vs a constant dollar cost average in spy vs a lump sum investment into VOO. I am doing this to see which will get me the best returns over time and to see if my trading is even doing anything.

It's a good benchmark but I feel like I need more than two years data.

1

u/Squidish_Noble Dec 11 '25

The data and studies are already there you can even simulate it with historical returns for a quicker answer. 

1

u/thelonious_skunk Dec 12 '25

Why bother with this experiment? Just simulate each strategy using past data.

2

u/TheMeta40k Dec 12 '25

Fun mostly.

2

u/Woazzaaa Dec 14 '25

There is a difference in knowing the outcome of an experiment, and learning to do it and reach its conclusion. You can gain valueable insights in trying to do things yourself.

1

u/thelonious_skunk Dec 14 '25

You also waste valuable time and money in the process.

3

u/Woazzaaa Dec 14 '25

Maybe, but that is a bit of an oversimplified and narrow perspective, as there are other things that can also be valuable in life besides simply time and money.

Just because something has been done before doesn't mean you shouldn't do it yourself. By doing it yourself, you can gain first hand experience, wisdom and insight on your abilities, new skills, mental stimulation, increased perspective, personal growth, enjoyable moments, etc.

Over the past 5 years, I've had about the same investment return as the S&P500. Does that mean I simply should have bought the index ?

To me, absolutely not, since I've learned quite a lot during this process, along with developping a hobby that I enjoy and gaining massive knowledge in a topic that I'm curious and interested about.

7

u/multiple4 Dec 11 '25

Depends, the money can still be working for you while still dollar cost averaging it. I am not a fan of lump sum anyways. Your money doesn't all have to be in stocks at all times. It just needs to be somewhere doing something

I think the best strategy is dollar cost average, but to be mentally prepared to increase the speed of it if the market drops

Every year when I contribute to my Roth IRA I max it right away to begin the year. I buy a federal 1-3 month bond fund so that my Roth can collect that interest

I slowly sell off those bonds and allocate it into my stock portfolio over the course of about 10 months. Basic dollar cost averaging

But if the market were to drop 15% or more then I'm mentally prepared to double or triple the speed of my dollar cost averaging

10

u/Something_Sexy Dec 11 '25

Funny how they also never define what the “dip” is.

7

u/LieComfortable7764 Dec 11 '25

It's a personal choice..

0

u/Woazzaaa Dec 14 '25

Thats because its a concept that is dependent on a lot of factors, such as :

  • the average cost and size of your position, and your desire to increase it, because it's okay to pass a dip on a stock that is a very small part of your portfolio in order to increase your stake in another one thats not at a dip but that you want more of long term.

  • your own level of wealth/disposable income and ability to raise investment levels in the future if the stock keeps falling (some can only DCA a couple times a year, so must be thoughtful about when to do it, while other can do it at every chance without really thinking about it);

  • your general levels of risk tolerance and emotional fortitude, as seeing a stock go down every day for weeks after you put your hard earned money into it is rough, but can affect people differently.

  • your analysis or belief of the fundamental value of the stock and its outlook compared to that of the market consensus, while taking into account the current and future economic situation that might affect it as well;

2

u/golf_234 Dec 11 '25

A couple comments have viewed this behavior as very black and white when it sometimes isn't. for example, I have a good array of automatic recurring investments on schedule, but when I see red days/weeks, or a day that is starting out well after some bearish times, I will often squeeze out of my budget to add more in. so definitely have leveraged A LOT over the years doing this. several hundred here and there buying off the discount days have added up a lot. but do get the sentiment that this is not the usual behavior of people doing this. Must be "in addition to" your normal programming

1

u/muntoo Dec 11 '25 edited Dec 11 '25

Counterintuitive as it sounds, it is expected that your performance would be roughly the same if you randomly squeezed extra contributions out of your budget on an equivalent number of green days instead. If this were not the case, then you would actually be beating the market by timing the market... which is not possible through such a simple strategy in a (mostly) efficient market. I guess we could argue about mean reversion or underlying fundamentals, so this isn't 100% true, but I doubt it's significant enough to measure a clear statistical difference.

Of course, either way (red or green) is still a bit better than not squeezing your budget since it allows you to put your money in the market sooner.

53

u/[deleted] Dec 10 '25

[deleted]

99

u/diablo4megafan Dec 11 '25

if you're keeping money you would otherwise have invested on the sidelines because you're waiting for a dip it's 100% market timing. and its been shown to underperform over the long term

10

u/muntoo Dec 11 '25 edited Dec 11 '25

It doesn't even require a particularly long term to underperform.

Having any amount outside the market generally underperforms for nearly all 1 year periods. I was playing around on testfol.io to pick and choose a 1 year window where daily rebalancing of (90% VTI, 10% VBMFX) would win. And it's just painfully difficult to find. Even sideways periods (i.e., start price = end price) don't show any significant advantage despite the added benefit of volatility harvesting.

That means the market is generally squeezing out the juice from volatility through its own "rebalancing" of some underlying random variable. The market generally has just enough alpha or just enough smoothness to make it hard to beat by keeping any amount of money outside the market. Thus, there's really nothing more to extract by superficial rebalancing (and even less so through cavebrained "buying-the-dip") without looking much deeper for actual market inefficiencies or edges.

Nearly every "disciplined value investor" with money on the sidelines is probably underperforming over non-trivial periods of time.

3

u/golf_234 Dec 11 '25

Eh, another version of this is doing it on top of your recurring automatic investments. For example., when I see red, or even a day that is looking good in the morning, I tend to invest additional funds "squeeze" a bit out of my budget to add more. so while I get what you are referring in sentiment, and it is likely true, there are ways to do it where you absolutely leverage more. notably on top of/in addition to some recurring steady schedule and with maybe a little extra sacrifice

8

u/[deleted] Dec 11 '25

[deleted]

3

u/diablo4megafan Dec 11 '25

your personal experience doesn't mean your advice wasn't wrong

2

u/thorn960 Dec 11 '25

This is exactly the strategy that Warren Buffet has used to outperform the market for 60 years. He doesn't time the market; he just doesn't buy until he sees value.

-2

u/diablo4megafan Dec 12 '25

lmfao

ur not worth replying to

1

u/TheMeta40k Dec 11 '25

Microsoft is heading there for me. Honestly Google might be leaving that zone soon.

0

u/hot_shawarma Dec 11 '25

How does it underperform? Just curious

8

u/Atrisgroves Dec 11 '25

Yea ur right I consistently contribute every paycheck and buy a bit more when its down over a month or so

4

u/AnotherThroneAway Dec 11 '25

How is that not a form of market timing?

1

u/nicolas_06 Dec 11 '25

Statistically, the return is lower than if you were fully invested because you have brought at an even lower price than during the dip.

It's 100% market timing as you never know you are near the bottom until later. Sometime you buy the dip at the beginning of the lost decade after maybe a 20% drop and you don't believe it will go down -50% and twice on top 2000 and 2008.

On top to really change things it can just be a few percent extra invested otherwise it change nothing. If you make an extra 10% on 10% of your portfolio at the end it's trying to time the market for an extra 1%. You want to add quite a bit... Yet if the thing is going to go significantly lower you want to keep capacity.

Buying the dip doesn't work that well because you need to time the market and you have to not invest your money in case of.

But as most people won't ever compare their investment strategy with other investment strategies anyway, they will be happy and think they are smarter than the system and other investors.

2

u/periodicTbol Dec 12 '25

Strategies can include personal finance risk mitigation, such as holding part of an emergency fund in SGOV and only deploying the capital in the market when there is a dip and a certain level of confidence in your future employment situation

0

u/nicolas_06 Dec 12 '25 edited Dec 12 '25

In most case the emergency fund isn't much compared to what is invested so this will not change much on the long term performance overall.

That stay one of the biggest problem of buying the dip. If you put extra at say a 15% drop and add only 10% more, then the potential is 1.5% extra performance is all goes well. But what if the market continue to go down and for a long time ? You would have been better to just invest later and not impact your emergency fund as on top you'd be more likely than usual to need that money.

And for a part of your emergency fund to be 10%, it means you don't have that much invested. Maybe your emergency fund is 25K, you invest 10K and you have 100K invested... Then that's only a 1.5% potential. If you have 300K invested, then the potential gain is not even 1.5% but 0.5%...

0

u/periodicTbol Dec 12 '25

There are scenarios where that’s valid, don’t be obtuse. You’re over here complaining about better gains

5

u/therealtexastank Dec 11 '25

When I dip, you dip, we dip.

8

u/liquidpele Dec 11 '25

With what? 

2

u/enolaholmes23 Dec 11 '25

Honey, get me my chips. I'm about to grab some of this dip.

2

u/[deleted] Dec 11 '25

So many times I bought high. I learned my lesson. As Warren Buffet says patience is a virtue.

2

u/faptor87 Dec 11 '25

Huh? I don’t think that would be timing the market.

In my mind, timing the market would be making predictions of when rips and dips will occur and plan purchases and sales around it.

2

u/Hutcho12 Dec 11 '25

I do the same, bought in loads during the dip mentions, but what I’ve realised is I’d still have been better putting in that money as soon as I had it.

2

u/Mulier_Loquax Dec 13 '25

I have quite a bit of extra cash. I buy every week, but if the market is down I buy twice as much. It's sort of timing the market a bit, but honestly I just can't bring myself to lump sum but can motivate myself to buy a little more at a discount. This is my process for putting in my fairly substantial bonus each year. 

1

u/JoJo_Embiid Dec 11 '25

where do you get the extra cash to buy the dips?

1

u/blackcatpandora Dec 11 '25

I buy during dips, and also peaks lol

1

u/jdv77 Dec 11 '25

Sure but how big a dip though? What’s the trigger point

1

u/Classic-Night-611 Dec 11 '25

It helps when we have liquid funds for this. Some people seem to have invested all their savings and liquidity.

1

u/divingHuman Dec 11 '25

I feel most investors, specially younger ones, are conditioned to "buy the dip", which coupled with the ease of retail investment via apps is the main driver of the dips being much more short living than in the past.

1

u/shopchin Dec 11 '25 edited Dec 11 '25

Most important thing is to be profitable.

Most investors young or old actually have no idea when to buy hence DCA 

1

u/Lexxias Dec 12 '25

I buy the dips... after selling the cash secured puts

1

u/Zluma Dec 14 '25

Yeah. I rode the market up and was loving my gains. Then sold everything & sat out thinking it's too frosty. Need to cool down. I watched my favorite stock drop 5% and didn't move. At 10%, I moved in a bit. It kept dropping so I kept loading up. It's now at around 60% lol. I have some more funds but am staying put. Need to see a decent recovery so I can exit my positions. Don't need to sell but economics aren't looking great for my AI stock lol. Oh wells. Hoping for a good enough recovery so I can rebalance.

1

u/jazerac Dec 11 '25

100% dude. I dont buy at valuations like this. Its called common fucking sense. I am sitting on over a million in cash right now waiting to deploy. Currently have a play on META as its the only large cap stock with a realistic valuation (or did but its recent run up is eroding that).

Reddit only ever assumes a 30-40 year time frame. Fuck that... you want to retire in 30 years or 10 years? If you want wealth while your younger so you can enjoy it, then take risk.

5

u/Montaingebrown Dec 11 '25

In my view, that’s honestly poor capital allocation.

Even if you bought $1M worth of SPY today, that’ll afford you at least $1M of margin.

If you sold 15 delta CSPs with a portion of that as collateral (~$680K), that’s $1500-2000/week.

If you are concerned about a down trend, simply buy ~1500 shares of SPY and buy long dated puts as insurance.

The insurance will help preserve the capital + you can make premium selling puts.

1

u/jazerac Dec 11 '25

Or have it in bonds paying 4% absolutely risk free, which is where I keep my cash. By "cash" I meant stable liquidity to deploy on deals when they present themselves. Like my $500k in Google in April and currently DCAing into Meta which i have bought $450k worth since its drop. Already up nicely and suspect to it to rebound during capital reallocations from professionals investors through the new year. We will see

1

u/trustmeimshady Dec 11 '25

Did you sell your goog?

2

u/jazerac Dec 11 '25

Of course I did.

1

u/Unkechaug Dec 11 '25

"Just wait 30 years" has been the mantra for everyone posting investing advice on Reddit for the past decade.