We just witnessed a valuable lesson in trying to time the market

As of midweek, the S&P/TSX composite index was up 2.7 per cent for the year to date and the MSCI Europe Australasia Far East Index was up 4.5 per cent.

The S&P 500 was down 4.5 per cent, but it has been a consistent outperformer in recent years.

Stocks fell hard in the early days of the trade war, but the chaos has either stabilized or at least been normalized. While share prices are still down from their 2025 peaks, the overall picture for the year is surprisingly OK unless you sold your stocks at the worst of the market decline.

In an interview, here’s how veteran financial planner Travis Koivula described investors selling stocks in a downturn: “My experience is that the market’s fallen, usually about 10 or maybe 15 per cent, and they go, ‘you know what? The news is really bad, right now I’m going to sell.’ So they sell, the market continues to go down, and they say, ‘thank goodness I didn’t stay in.’ And then there’s recovery.”

Mr. Koivula wrote in a recent and widely read post on LinkedIn (https://www.linkedin.com/feed/update/urn:li:activity:7322611196010921984/) that some of the most frustrated people he has met are those who sold stocks in a down market and moved into cash. They end up torturing themselves trying to pick the right moment to get back into the market.

Stocks may start recovering before the news turns from bad to good. And then there are investing cliches that scare people into inaction – “dead cat bounce” and “don’t catch a falling knife.”

By the time investors feel confident buying back into the market, much of the rally has already happened and stocks are expensive compared to where they were. To really make market timing work, you have to sell at a stressful time and buy back in when things are even worse.

“I’m sure there is somebody out there who has timed the market correctly,” Mr. Koivula said. “But my experience is that staying the course has worked better for clients.”

The level of anxiety about stocks recently seems out of synch with the actual level of market declines. Mr. Koivula puts this down to U.S. President Donald Trump. “I think he’s a triggering factor for many people,” he said.

“I hear this all the time – we have never had a president like him.”

Another factor that makes people feel anxious about their investments is social media, Mr. Koivula said. He thinks investors are smarter than ever, but the flow of information coming at them can be overwhelming at times.

Mr. Koivula said humans are wired to be proactive in stressful times, and doing nothing can seem like failing.

Something to keep in mind if stock market upheaval is getting to you and you feel compelled to sell: There’s a whole other kind of stress waiting for you as you try to time your move back into stocks.