#INVESTOR BEHAVIOR
An investor who put the same amount to work every year, always at the year's highest point, thirty years running, would have multiplied the money by 3.45 in real terms. Buying at each year's low — perfect timing — yields 21% more. That is all.
Published on August 31, 2026 · to be rechecked on February 28, 2027
The exercise runs on Robert J. Shiller's monthly S&P Composite series. Thirty annual contributions of 1,000 constant euros, from 1994 to 2023. The absolute unlucky investor buys, every year, in the month when the real index peaks: the result is 103,446 euros, or 3.45 times the 30,000 paid in. The absolute lucky one hits each year's lowest month: 125,160 euros, 4.17 times the stake. The gap between the worst and the best possible execution is 21%, or 0.64 points a year. Tested across the 95 rolling thirty-year windows since 1900, that gap ranges from 16.6% to 38.9%, with a median of 20% — and the worst timing never loses money in real terms, in any of those 95 windows.
Should you wait for the right moment to invest?
Over thirty years, the gap between the best and the worst entry point is around 20%. What the calculation does not measure is the cost of having waited without ever entering at all.
In other words: timing costs less than waiting.
Four caveats, because they matter
- The "worst timing" is defined after the fact. Nobody can deliberately hit each year's peak: it is a theoretical bound, not a lived scenario.
- The calculation assumes the investor never sells and never stops contributing for thirty years. That is the strongest assumption in the exercise, and the one that most often breaks in practice.
- It covers the US market, the most favourable major market of the period. The same simulation on Japan since 1990 would give a different answer.
- The 3.45x multiple is a real, dividend-reinvested return, before fees and before tax. One percentage point of annual fees would take out a substantial share of it.
Why it still matters: a timing mistake costs less than people assume; staying out costs far more.
For you
- How long have you spent waiting for a better entry point, and what has that wait cost you?
- If the worst possible moment still returns 3.45 times the stake over thirty years, what does the right moment actually change?
Source: reproducible Ze Finance calculation on Robert J. Shiller's monthly S&P Composite series, Online Data (Yale), September 2024 vintage — 30 annual contributions 1994-2023, real total return.
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