Every once in a while, historically, a robust stock market suffers a correction or even a crash and then recovers – sometimes quickly, other times over a longer period. We’ve even experienced such market swings fairly recently.

Some mutual fund investors may wonder if such a situation presents an opportunity to sell high and buy low. In theory, you should profit considerably if you sell investments at or near a market peak and reinvest when the market bottoms out.

That is correct in theory, but it’s another story in practice.

Predicting the market is risky

You cannot predict, with any consistency, when the market has peaked and is due to fall. Say the market hits a record high, and an investor who is attempting to time the market sells a large proportion of their equity fund investments. What happens if the market continues to climb? Not only would the investor miss out on the gains, but they would need to reinvest when prices are higher.

That risk is real. Historically, record highs are often an indicator of continued market growth, not necessarily a signal of a market due for a correction. A good example is this year’s performance of Canada’s S&P/ TSX Composite Index, which has recorded multiple record highs in 2025.

Even if a market timer gets lucky and the market plummets after they sell, they can still miss out. To succeed at timing the market, you must guess correctly twice – when to sell mutual fund investments and when to buy back in. While you’re waiting for an ideal time to reinvest, the market could rebound quickly.

Investing regularly pays off

By investing on a regular basis, you benefit without having to anticipate the market’s direction. When markets are down, you purchase more fund units at lower prices. In rising markets, you participate in the growth without overinvesting when prices are higher.