Buy low, sell high? Expert explains why retail investors rarely succeed at market timing

Market timing refers to trying to predict the best times to buy or sell investments based on future market movements. While this sounds smart in theory—buy when prices are low, sell when high, it rarely works in practice, especially for the average investor.

Financial advisor Manoj Arora, in a social media post, wrote that markets are unpredictable as economic data, global events, interest rates, and investor sentiment change constantly. Even professionals often get the timing wrong.

Emotions get in the way: Retail investors tend to panic during downturns (selling low) and get greedy during rallies (buying high).

He explained that missing the best days matters. Studies show that missing just a few of the market’s best days in a year can dramatically reduce long-term returns. But those best days often come right after the worst ones—making it extremely difficult to time right.

"Most retail investors will lose more money trying to time the market (finding a good entry and exit point). For them, creating and then maintaining a balanced portfolio will be the only way to 'buy low and sell high'," Arora wrote in his post on X.

Arora was replying to finfluencer Akshat Shrivastava's post on making money from stock investing.

In his post, Shrivastava explained that to truly make money from stock investing, it's not enough to simply buy and hold—or worse, invest blindly through SIPs (Systematic Investment Plans) without a strategy.

1. Entering at the right point
Buying a stock at a good price is critical. It sets the foundation for your returns. Valuation matters—entering when the market or a particular stock is undervalued increases the odds of profitability. SIPs may catch some good entry points due to rupee-cost averaging, but they also average into expensive phases, which can dilute returns.

2. Riding the momentum
Once you’re in, you need to stay invested long enough to benefit from upward price movement. This is where discipline comes in—holding through volatility to ride the wave. SIPs can do this partially, but they often fail to capitalize fully on strong rallies if you don’t adjust or ramp up contributions when momentum is strong.

3. Exiting at the right time
This is where most retail investors fall short. Knowing when to book profits and get out is critical to avoid giving back gains during corrections. SIPs don’t have an exit strategy—you stay invested even when valuations turn frothy or markets peak.

4. Rotating capital
True wealth creation often comes from redeploying profits into the next opportunity—sectors, geographies, or asset classes. SIPs lock you into a static strategy, offering no mechanism for dynamic rotation.

The risk of ignoring this process:

You're exposed to large market crashes (like 2008 or 2020) with no buffer or trigger to exit.

Over decades, SIPs only work if the market consistently trends upward—a big if.

Japan and China are examples where markets stagnated for years, despite economic size.

Why a balanced portfolio is better

A balanced portfolio (typically diversified across asset classes like stocks, bonds, real estate, and even cash) offers a better long-term approach:

Diversification smooths out volatility: When some assets underperform, others may outperform, keeping your overall portfolio more stable.

Systematic investing reduces emotional mistakes: Regularly contributing to a diversified portfolio (like through SIPs) means you invest through highs and lows—automatically buying more when prices are low and less when prices are high.

Periodic rebalancing enforces 'buy low, sell high': When you rebalance (e.g., selling stocks that have gone up too much and buying more of those that are lagging), you're mechanically doing what market timers try—and fail—to do.