Should You Wait To Buy Stocks?
A common tendency keeps many investors on the sidelines: waiting for the bad news to stop or for an official recession to be declared before buying stocks.
But here’s the truth— by the time the dust settles, earnings stop falling, or a recession is officially declared, the market has likely already moved on.
The stock market isn’t the economy. It’s a forward-looking machine that processes information and expectations in real time.
Sam Ro summarizes it nicely:
Believe it or not, in a given moment, the stock market does not care too much about the present state of things. That’s because expectations for the present will have been priced into the market days, weeks, and months in the past.
That is to say, the stock market reacts to news to the degree the new information 1) is not in line with what the market expected for the present, and 2) changes what the market expects for the future.
Remember Covid?
In 2020, the stock market bottomed a full year and a month before earnings did.
Great insight from Callie Cox:
In the 11 recessions since 1950, the S&P 500 has peaked an average of six months before the economy has entered a recession. The same can happen on the other side, though. Since 1950, the S&P has bottomed an average of three months before a recession has ended. Often, when the environment feels extra painful, the market is already looking ahead.
This disconnect can be maddening. “The company just posted strong earnings, why is the stock falling?” Because markets don’t price in what just happened—they’re constantly adjusting based on what they think will happen going forward.
That’s why investing based on headlines is so risky. If you wait for good news, you’ll likely miss the gains. Stocks often rebound when things still feel terrible…
Yes, there are always headlines to worry about. Right now, there are too many to count.. Tariffs, unpredictable policy shifts, and murky earnings forecasts. When companies don’t offer forward guidance, that creates a wider range of expectations—and a wider range of potential outcomes (big ups and downs).
But uncertainty is a constant in investing. The goal isn’t to eliminate it—it’s to manage through it.
The real risk isn’t that the market goes down. All investments fluctuate. The risk is sitting in cash, waiting for the perfect moment that never feels quite right. Because by the time it does, prices may already be much higher—or you may still be on the sidelines, wondering, “Did I miss it?”
Some investors never got back in after the Great Financial Crisis. And they missed one of the greatest bull markets in history.
Getting out is easy. Getting back in? That’s the hard part.
So instead of trying to time the news cycle or guess what’s coming next, stick with a systematic approach. Keep dripping money into the market. Ideally, this is money you don’t need for at least two years. And if prices fall further, don’t panic. That’s not a reason to abandon the plan—it’s the reason you have a plan.
It’s almost impossible to ignore the chaos at this point in time.
But don’t lose sight of the resilience of corporate America. The best-run businesses continue to adapt, innovate, cut costs (or just pass them onto us…), and find new opportunities—even in challenging environments. And they work for you…
I’ve never been a fan of betting against some of the most well-run companies in the world.
Even with recent turmoil, stocks have had a hell of a run. As Ben Carlson notes, the S&P 500 is still up 16% per year over the last five years.
Uncertainty will always be part of the equation. The key is to invest in a way that allows you to stay consistent—through both the ups and the downs.
Disclosure: This material is for general information only and is not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results.
All indices are unmanaged and may not be invested into directly.
All investing includes risks, including fluctuating prices and loss of principal.