Everyone knows the market goes up over time. What stops people is the suspicion that right now, specifically, is a bad moment. Prices feel high, or something unsettling is in the news, or a correction is obviously coming. So the money waits in cash for a better entry point, and the wait turns out to be the expensive part.
What waiting actually costs
Take someone putting £300 a month into a global fund, assuming 7% a year before charges and 0.5% of charges, which is the default in our calculator. Over 25 years that becomes £224,651, of which £90,000 is their own money.
Now suppose they spend five years waiting for a better moment, then invest exactly the same £300 a month for the remaining 20. They end with £147,126.
The delay cost £77,525. They paid in £18,000 less, so the five years of hesitation cost about 4.3 times the money they did not contribute. That multiple is the whole argument, and it has nothing to do with predicting anything: it is just the compounding those first five years would have gone on doing for the following twenty.
The five years of waiting cost 4.3 times what was not paid in. Not because the market was kind, but because the earliest money compounds the longest.
Even a terrible start beats waiting
The obvious objection is that this only works if you happen to start at a decent moment. So consider the worst case anyone actually fears: you begin, and the first five years return nothing whatsoever. Not a crash and a recovery, just five flat years in which every contribution sits there doing nothing.
Then the following 20 years behave normally. You end with £212,942, which is £65,816 ahead of the person who waited those same five years and then invested through the identical 20 good ones.
That is the part worth sitting with. A start bad enough to make you question the whole exercise still beats hesitating, because the contributions you made during the flat years were bought cheaply and then had two decades to compound. Waiting produces no such consolation: the money simply was not there.
Why timing feels like it should work
It feels like it should work because the losses are vivid and the gains are not. A fall is an event, reported and discussed. A recovery is an absence of events, and nobody writes about the quarter in which nothing happened. So the mind keeps a detailed record of the crashes it sat through and almost none of the years it would have missed by staying out.
The other half of the problem is that getting out is only half the trade. Selling before a fall is worthless unless you also buy back before the recovery, and the recovery usually begins while the news is still bad. That is two correct decisions in a row, against a market that has already priced in what everyone knows.
Put your own numbers through the compound growth calculator and change the start date rather than the return. The delay does more damage than the assumption.
Volatility is the price, not the risk
The two get confused constantly. Volatility is the fact that the number moves about, sometimes violently, and it is the reason shares return more than cash over long periods: you are being paid to tolerate it. Risk is something else entirely. Risk is not reaching the thing you were saving for.
Held for a month, a global fund is genuinely unpredictable. Held for 25 years, the thing most likely to stop you arriving is not a fall in prices, it is not having contributed enough for long enough, and the second of those is entirely within your control. Treating a temporary fall as the danger, and a decade on the sidelines as safety, gets the two exactly the wrong way round.
What to do instead
Contribute on a schedule and stop having the conversation. A standing order on payday removes the decision entirely, which is the point: the enemy here is not a bad forecast, it is the option to keep deferring. If a lump sum feels too exposed to a single day, split it over a few months and then stop.
Decide now what you will do when it falls, because deciding during a fall is how people sell at the bottom. The answer that works for almost everyone is to do nothing, and the reason to write it down in advance is that it will not feel obvious at the time.
The one thing genuinely worth optimising is what compounding is working against. A single percentage point of charges on that same £300 a month costs £35,123 over the 25 years, which is a larger and far more certain effect than any view you might take on the next six months.
None of this requires a view on where prices go next, which is exactly why it is reliable. The boring plan, start to finish, and if you are not sure which rung you are on, the AI Wealth Assistant works it out from your own figures.