There’s something peaceful about a quiet summer evening in the park — until, of course, you see a dog chasing squirrels. One moment it’s after a squirrel to the left, then it spots another to the right, and off it goes again. Ten minutes later, the dog is out of breath and still empty-pawed.
Oddly enough, this is a perfect metaphor for how many people approach investing.
The Allure of “X”
Investors often ask, “Should I move everything into X right now?” That “X” could be anything — tech stocks, cryptocurrency, gold, a trending sector, or even pulling everything into cash. The truth is, X constantly changes depending on headlines, social media, and market buzz.
The problem isn’t necessarily the investment itself — it’s the behavior. When people jump from one “hot” trend to another without a long-term strategy, they’re chasing squirrels. And like that dog in the park, they usually end up exhausted and no better off.
Why Market Timing Rarely Works
Many investors are tempted to “time the market” — pulling out during downturns with plans to jump back in when things settle. But this approach is incredibly risky. Consider this:
If you invested $10,000 in the S&P 500 from 2005 to 2024 and did nothing, your return would have been around10.4%annually.
Miss just the10 best days? Your return drops to6.1%.
Miss the30 best days? That drops further to3.1%.
Miss40 of the best days, and your return goesnegative: -0.6%.
The worst part? The market’s best days often come right after its worst. Trying to avoid one often means missing the other.
Staying the Course
When markets get volatile, it’s tempting to change direction or chase the next big thing. But long-term success rarely comes from reacting to the noise. It comes from staying consistent, sticking with a thoughtful plan, and resisting the urge to dart after every new opportunity.
Of course, it’s important to review your investments periodically. Strategies may need to evolve over time. But the key is to make changes thoughtfully — not reactively.
The Takeaway
In investing, just like in life,consistency beats chaos. The next time you’re tempted by headlines or hype, remember the dog chasing squirrels. And ask yourself a better question: “What can I do today to stay aligned with my long-term goals?”
The answer is simple:Don’t chase squirrels.
*Content Prepared by Jonathan Neher & Bill Good