The new year typically brings the same investment timing questions each and every year:

• Should I wait until the end of February deadline before putting my RRSP contribution in?
• Should this be the year I switch to regular monthly contributions?
• Should I put money into my TFSA now or wait for a market correction?

While there is no doubt that timing contributions at just the right time can add significantly to investment returns, it is very difficult to do once and near impossible to pull off repeatedly. The brightest investment minds in the world regularly make bad calls so why does the average investor think they can do better?

Attempting to time the markets and avoid pullbacks more often lead to missing out on significant advances since they occur quite often at unexpected times.

The key to successful investing is actually quite simple – you need the discipline to stay invested and understand that it is time in the markets, not timing the markets, that creates most wealth.

US large cap stocks returned over 500 per cent between the low of March 2009 and the high in February 2020, and history has shown this is the norm and not the exception.

Major market events that felt quite serious at the time including the 2008 “great recession”, the bursting of the dot-com bubble, the “Black Monday” event in 1987, and now the COVID correction of 2020, look like minor blips in long term market charts.

With the odds so overwhelmingly in favour of gains, why do so many investors fight those odds trying to time the market? In my opinion, it all comes down to two basic human emotions – fear and greed. Allowing these two emotions to steer your investment decisions can be very dangerous and costly… 

So, as we start a new year off in times that are very much uncertain, do yourself a favour and don’t think too much about when to put your hard-earned money into your investment accounts. If the money is earmarked for long-term savings, put it into your account and forget about it.

Or better yet, setup automatic monthly contributions to your RRSP and TFSA accounts moving forward and resist the urge to change them. 

While the timing of the next downturn is hard to predict, staying on the sidelines looking for an optimal entry point usually results in missing out on the biggest market gains. What is predictable is that markets will continue to advance over time.

Accept that market volatility will always exist and let time be your friend.