CIO Insights: How do you make millions? Give it time.

10 minute read

"Time in the market beats timing the market," the saying goes. Many investors know this – but acting on it is harder. When markets hit new highs, it feels safer to wait for a pullback; when they fall, it feels safer to wait for the bottom.

It's why the most common questions we get from clients sound similar in every kind of market: “Should I wait for a dip before investing?” “How often should I invest, and into what?” “Is DCA always the best move for me?”

Here are the facts: an investor who put $10,000 into the S&P 500 at the start of every year over an investing life of 30 years would have more than $2 million today. Invest more, or start earlier, and the sum grows several times over. That outcome rests on two ordinary drivers: compounding over a long horizon, and dollar-cost averaging (DCA) – investing a consistent amount on a regular schedule.

In this month’s CIO Insights, we run the numbers on decades of data to show exactly how time in the market beats timing the market – plus how to put regular investing into practice, and when, if ever, a lump sum wins. The conclusion is clear: the best time to start investing is now.

Key takeaways 

• “Should I wait for a dip before investing?” No – the cost of waiting is more than you may realise, and much more than bad timing. Many people hold back from investing because they’re afraid of buying in before a correction, or because they’d like to time a better entry point. But because bull markets tend to dominate, an investor who waited to buy during dips lost to regular investing 84% of the time. Bad timing, on the other hand, costs far less. Over the past 30 years, even an investor who had the worst timing still would’ve enjoyed a 4x return compared with staying in cash. Buying at the “worst” time only costs you a portion of the best outcome; staying in cash costs you nearly all of it.
• “How often should I invest, and into what?” How often you invest barely matters; what you buy matters far more. Whether that investor deployed each year’s $10,000 annually, quarterly, monthly, or weekly, the return was 10.8% a year. Sticking to any regular schedule can help keep you invested – one simple approach is to match it to your income, and invest as you get paid. The more important decision is what you buy, because DCA can’t rescue a bad asset: averaging into a single stock or market that goes nowhere still leaves you behind. A broad, global exposure avoids that problem, which is why we’d suggest it as the default for most investors.
• “Is DCA always the best move?” For most people, yes – a lump sum wins only under a narrow set of conditions. If you have idle cash today and can accept the volatility, investing a lump sum earns more on average. But that edge applies only to the year you deploy the money. After that, the lump sum and the averaged-in money are both fully invested and earn the same return, with the difference reduced to a fraction of a percent a year over a longer time horizon. Since it narrows the range of outcomes, spreading out an investment can give peace of mind, which would suit an investor feeling intimidated by going all in at once.

(See our Glossary at the end for a breakdown of the terms used in this article.)

“Should I wait for a dip before investing?”

This is one of the most common questions we hear from clients, especially when markets hit new all-time highs. And rather than defaulting to the common intuition – that it's safer to wait for a dip than to buy at record highs – we put it to the data. We ran simple, rule-based investing strategies using more than five decades of historical S&P 500 data (from 1970 to the present) and measured what each would have earned. Each rule is mechanical, so anyone could have followed it in practice.a Here's what we found.

Regular investing wins versus waiting for the dip 84% of the time

Picture two investors who each set aside a fixed amount at the start of every year for a decade. The first invests that amount the day it arrives – simple dollar-cost averaging (DCA). The second keeps the cash in short-dated US Treasury bills (T-bills) and only buys once the S&P 500 has fallen 20% from a high (the standard definition of a bear market) then puts the entire pile to work. We ran this comparison over all rolling 5-, 10- and 15-year periods since 1970.

As Exhibit 1 shows, the regular investor outperformed the dip buyer in 84% of rolling 10-year periods – enough to end with about 29% more wealth. It may sound counter-intuitive, but the reason is logical: bull markets last far longer than bear markets, so holding cash until a crash means sitting out the market while it climbs. Any lower price you get by buying at the bottom is small next to the gains you missed on the way up.

The edge doesn't take decades to show up, either: over rolling 5-year periods, DCA still came out ahead, by 13 to 20% depending on the size of the correction. The dip-buyer's few wins came almost entirely in decades starting in the 1970s, when bear markets were frequent and interest rates on cash were in the double digits.

What’s more, holding out for a bigger decline only widens the gap. As Exhibit 2 below shows, DCA finished ahead for every dip size and horizon we tested. Over rolling 10-year periods, a regular investor ended with 18% more wealth than someone who waited for a 10% dip, 29% more than someone who waited for a 20% correction, and 34% more than someone who held out for a 30% crash.

The dip you’re waiting for may take years before it arrives

Why does waiting cost so much? Because major dips are rarer than they may seem, as shown in Exhibit 3 below. If you pick any month since 1970 and start waiting for a 20% decline, one would’ve taken a median of 4.4 years to arrive. In a tenth of the rolling 10-year periods we tested, one never arrived at all. So any investor waiting for a dip would be left sitting in cash the entire time while the market compounded without them.

Holding out for a 30% crash stretches the median wait to 5.5 years, with an 18% chance of waiting more than a decade. Waiting for just a 10% dip shortens the wait to under a year, but a 10% discount is too small to make up for the time spent out of the market. With DCA there is no wait: every contribution is invested as soon as it arrives, which is why it wins so consistently.

Even an investor with the worst market timing outperformed cash

What about the other common investor fear, buying just before a crash? Most people have at least 30 years to invest, so we ran the “worst” case scenario over that horizon: an investor who set aside $10,000 a year from 1996, but only ever invested at the exact peak before each of the S&P 500’s four bear markets (declines of 20% or more) during that period.

Even that investor compounded at 8.3% a year, turning $310,000 of contributions into $1.4 million – four times the $386,000 the same savings would have earned in cash, as Exhibit 4 below shows. At the other extreme, the best timer – who had the perfect foresight to buy at every bear-market bottom – earned 12% a year, or $2.8 million. Regular investing needed no foresight at all and captured most of that: 10.8% a year, reaching $2.2 million.

Nor does that require a lucky starting year. Run the same $10,000-a-year plan over every 30-year stretch of S&P 500 returns since 1970, and the median outcome is roughly $2 million. 

Say you wanted to invest more: $25,000 a year instead of $10,000. That same 30 years of steady investing would have turned $775,000 into $5.6 million. Or say you had more time: if started in 1970, the same $10,000 plan over 56 years would have grown to nearly $50 million. While few people have an investment horizon that long for themselves, it’s a realistic timeline if your goal is to build generational wealth for your children and grandchildren. 

In each case, how well you time the market matters far less than whether you invest at all. In our original scenario, the worst possible timing still returned 8.3% a year, against 1.4% for cash. Bad entries are manageable; staying out of the market is what costs you.

“How often should I invest, and into what?”

So you've decided to invest regularly. Two decisions remain: how often to invest and what to invest in. The data tells us that the first decision barely matters; it’s worth less than a tenth of a percentage point a year. The second – what you buy – is the decision that determines your outcome.

Any regular schedule works, so match it to your income 

As Exhibit 5 below shows, how often you invest makes almost no difference. Take four investors who each put $10,000 into the S&P 500 every year since 1996 – one who invested it in a single go at the start of the year, one quarterly, one monthly, and one weekly. After 30 years, each ended with more than $2 million  – all four earning about 10.8% a year, with just 0.07 percentage points separating the fastest and slowest schedulesᵇ.

Since the schedule itself has minimal impact on the outcome, pick the one that you can keep with the least friction. For most people that means matching it to your income, and investing as you get paid. Doing so also puts every dollar to work as soon as it arrives, so nothing sits in cash while the market compounds – which is what makes DCA work in the first place.

The bigger decision is what you buy – the broader, the better

DCA gives investors discipline on when to buy; it says nothing about what to buy. Buying a poor investment regularly just means losing money on a schedule. An investor who DCA’d into Pets.com through 2000 averaged their way to zero when the company folded that November.

This is an example of idiosyncratic risk: risk specific to a company and not attributable to the overall market (which is known as systematic risk). If the fundamentals of a company are failing, DCA doesn't improve the odds of positive returns. Picking stocks is also a much harder game than staying invested in broad markets: research shows that most single US stocks have historically underperformed T-bills over their lifetimes, with the market’s gains coming from a small minority of big winners. 1

A single country also carries idiosyncratic risk, but how much varies widely. As Exhibit 6 shows, only 16% of US returns come from factors specific to the US, and for developed markets as a whole it is 1%. At the other end, roughly three-quarters of Brazilian and Chinese returns come from their own domestic factors, so you are largely betting on the characteristics of that one country. Go all the way to a global index and what remains moves almost entirely with one factor: the growth of the world economy.

“Is DCA always the best move?”

For most people, the answer is yes. A lump sum wins under a narrow set of conditions: you already hold the money, and you can accept the near-term volatility.

Suppose you hold a sum of cash today – like a bonus, an inheritance, or proceeds from a sale – and are deciding whether to invest it all at once or average it over the next year. Whenever an investment is expected to return more than cash, every dollar kept out of the market gives up that extra return while it waits. So investing the full amount immediately earns more on average.

But the gap is small. Take an asset that returns 8% a year with 20% volatility – which is broadly in line with what equity markets have delivered over the long run – while cash earns around 4%. We simulated around 300,000 possible market scenarios over one year, and measured the distribution of returns of a monthly DCA strategy versus a lump sum investment. Exhibit 7 illustrates the results. On average, DCA returned 6% – 2 percentage points lower than the lump sum’s 8%.

The upside of giving up those 2 percentage points of returns is a narrower range of outcomes – in effect, a trade-off against the risk of putting in the full amount just before a severe downturn. The lump sum's range of outcomes are much wider in both directions: because the investment is exposed to the market from day one, it takes the full force of whichever year you happen to get. 

That gap only applies to the year you put the money in. From then on, that money is fully invested and earns the same market return either way. Over a multi-decade time horizon, that one-time 2% difference works out to well under a tenth of a percentage point a year.

The data is clear: time in the market beats timing the market

More than five decades of data show the best time to invest is now. Waiting is the most expensive thing an investor can do: every year spent holding out for a better entry point is a year of compounding you don't get back, and the dip you're waiting for may take a long time to materialise. Bad timing, by contrast, matters much less over a longer time-horizon – even the worst market timer wins many times over against cash.

Remember the premise at the start of this piece: $10,000 a year into the S&P 500 since 1996 – a period which includes four bear markets – would’ve grown to more than $2 million today.

The only decision that mattered was starting. The rest is straightforward: invest as your money arrives, keep it diversified, and let time do the rest.

Authors

Stephanie Leung, Chief Investment Officer

Stephanie and her team oversee the full spectrum of investment products and portfolios offered at StashAway. She brings more than two decades of investment expertise across multiple asset classes. Prior to joining StashAway in 2020, she managed investment portfolios at institutions such as Goldman Sachs and multi-billion dollar family offices in the region.

Justin Jimenez, Head of Macro and Investment Research

Justin has more than a decade of experience in economic and investment research, and contributes to shaping the investment office's views on the global economy and asset classes. Prior to joining StashAway in 2022, he was an economist at Bloomberg.

Jim Tai, Head of Quantitative Research and Portfolio Management

Jim brings nearly two decades of quantitative research and systematic trading expertise to StashAway. Having managed quantitative strategies across leading financial institutions in Hong Kong and New York, he holds advanced degrees in Applied Mathematics and Engineering from Columbia and Princeton.

Glossary

Dollar-cost averaging (DCA)

Investing a fixed amount at regular intervals, regardless of the price on the day. Someone who invests $1,000 on the first of every month is dollar-cost averaging.

Lump sum

Investing an entire available amount at a single point in time rather than spreading it out. Investing a $50,000 bonus all at once is a lump sum.

Correction

A fall of 10% or more from a recent high. A deeper fall of 20% or more is usually called a bear market.

Treasury bills (T-bills)

Short-term debt issued by the US government, maturing in a year or less. They are treated as one of the safest places to hold cash.

Volatility

How much an investment’s price moves up and down, measured as the standard deviation of its returns and shown as an annual percentage. Higher volatility means a wider range of possible outcomes.

Idiosyncratic risk

Risk tied to one specific company or country. It can be reduced by diversifying.

Systematic risk

Risk shared across an entire market – for example, the global stock market – that diversification cannot remove.

Money-weighted return

The single annual rate of return that accounts for how much money was invested and when. This makes it the fair way to compare strategies that deploy cash on different dates. Also known as the internal rate of return (IRR) or the dollar-weighted return.

Endnotes

a. We use the US market in our analysis because it offers the longest continuous daily history for both equities and rates, which allows us to test our hypothesis over a longer period across various market conditions. Global equity indices have been highly correlated with the S&P 500, so the direction of our findings holds for a global exposure too, even if the exact figures differ.

b. In our comparison of DCA frequencies, the annual plan ends with slightly more, but only because of the setup. It assumes the investor starts each year with the full amount ($10,000) in hand. Investing it all on the first trading day means those dollars spend the most time in the market – they earned more simply because the money was invested longer, even though the annualised return was practically identical.

References

1. Bessembinder, H. (2018). Do Stocks Outperform Treasury Bills? Journal of Financial Economics. Retrieved from: https://ssrn.com/abstract=2900447 

Disclaimer: Returns data as of 30 June 2026 unless stated otherwise. Past performance is not indicative of future returns.