The First Rule of Investing Is A Total Lie

Introduction – Four Words That Cost Millions (0:00)

Bo: These four words have cost people millions and they could be costing you too. Guys, I am so excited to talk about this because I love helping people make more educated choices with their money. We’re going to break down where folks have been led astray and what they can do instead on their journey to financial independence. So, with that, let’s dive right in.

The Dangerous Advice: Buy Low, Sell High (0:22)

Bo: So, what are the four words? Buy low, sell high. You might be shocked to hear that this is dangerous advice, but why? Well, buy low, sell high is one of the first things we hear when we’re taught about investing. Let’s give credit where credit’s due. It makes sense why. It sort of demystifies the whole black box that most people think investing is. The idea behind the phrase is that you purchase shares of an asset like a company through stock when prices are low and then once those shares go up in value, you sell and that’s how you make money. On paper, that’s technically correct. But in practice, so many people make the same mistake over and over and over again because they hear buy low, sell high, and they think, “Oh, I need to buy and sell these investments at the right time.” No. Well, I mean, yes, again, technically speaking, if you buy when the price is low, and you sell when the price is high, you will make money. So, where’s the problem?

Why Timing the Market Is Impossible (1:18)

Bo: The right time you’re looking for is the problem. It’s virtually impossible to know. The market as a whole is only up about 54% of trading days. What this means is that your odds of buying and selling on the right days is barely better than a coin flip. That slim margin makes the idea of reliably timing when to be in or out essentially impossible. Missing even a handful of the market’s strongest days can set an investor back years. Yet those days are often scattered unpredictably among the very ordinary trading days. Not to mention strong market days are often stronger than weak market days are weak. Meaning that if you miss out on those days, you’re missing out potentially on huge upside. That’s why somewhere between 80 and 97% of day traders actually lose money. There’s a point in every investor’s journey where they discover that building wealth is not about being clever, it’s about being consistent.

The Better Strategy: Always Be Buying (2:17)

Bo: Buy low, sell high is often a losing strategy. So what should you do instead? We say always be buying. When you break it down, it’s a combination of two popular financial principles. Buy and hold and dollar cost averaging. The buying and holding keeps you invested so you don’t fall into the trap of waiting for the perfect moment to buy or sell that never actually comes. The dollar cost averaging adds steady automatic contributions that remove the pressure to predict short-term market moves. Together, they create a system where consistency beats guesswork and discipline beats emotion. Always be buying simply means you keep deploying your dollars to grow no matter what the headlines say or what the market’s doing.

Real-World Evidence: Morningstar Study (3:01)

Bo: Let’s illustrate this concept with an actual real-world example. A 2023 Morningstar study explored a simple question. Does waiting for the right moment to invest actually lead to better outcomes? To answer it, Morningstar compared two hypothetical portfolios from 2002 all the way through 2023. One invested money immediately whenever funds were available. The other attempted a form of market timing, holding cash when analysts believed the market was overpriced and only investing when valuations appeared favorable. Over the full period, the immediate investing approach outperformed the timing strategy by almost a percent, 0.76% per year. Across a 20-year time horizon, that difference compounds into a meaningful gap.

Bo: Morningstar emphasized that valuation signals weren’t necessarily useless because sometimes they point in the right direction, but the cost of being out of the market during periods of strong performance overwhelmed those benefits. Their broader conclusion was that consistent participation in the market tends to deliver better long-term outcomes than waiting for ideal entry points because a substantial share of total market returns occurs during short unpredictable bursts. In other words, staying invested isn’t a guarantee of superior returns, but historically, it has been a more reliable path than trying to anticipate short-term movements.

Charles Schwab Study: Perfect Timing vs. Consistent Investing (4:20)

Bo: And a 2025 study from Charles Schwab reinforces this idea by modeling how different investors handle the same annual contribution over a 20-year period. Each investor received $2,000 at the start of every year. One miraculously invested at the exact lowest point, another invested on January 1st, and a third invested at the highest point. So, one got the best market timing, one started at the beginning, and one had the worst market timing. There was a fourth investor also that just stayed in cash the whole time and a fifth who used our strategy always be buying and decided to invest on a monthly basis.

Bo: So while perfect timing obviously produced the best results in theory, the difference between perfect timing and simply investing immediately was surprisingly small, less than $20,000 over the entire 20-year period. More notably, waiting for the perfect moment led to dramatically worse results than just getting invested on schedule. The takeaway being that because short-term movements are nearly impossible to predict consistently, regular investing and staying invested tended to produce more dependable outcomes than attempting to try to time the market.

Closing – Make Volatility Your Ally (5:29)

Bo: When you adopt this mindset, volatility stops being scary and it becomes your greatest ally. You sleep better, you stay on track, and you give your future self the best chance to build real lasting wealth without ever trying to time it right again. If you want to know more about consistent wealth building, click right here. And as always, keep building towards your great big beautiful tomorrow.