Should You Sell Now and Buy Back Later? Why Market Timing is a Bad Idea

With a recession looming, a big question on investors’ minds is:

👉 Should I sell now, lock in some profits, and buy back later?

Let’s break down why this strategy often backfires—and what you should consider instead.

When Selling Might Make Sense

If you’re 50+ years old, have been investing for 20-30 years, and are close to retirement, you might want to shift some profits into safer assets like bonds or cash (always check with your accountant first for tax implications).

Why? Because you don’t want to risk delaying retirement due to a sudden market downturn.

But if you’re younger and still in the accumulation phase, selling now and hoping to buy back later is usually a losing game. Here’s why.

Why Trying to Time the Market is a Mistake

🔹 You’re Building, Not Cashing Out
Let’s say you’re buying 10 shares every month. After six months, you’ve got 60 shares with a goal of 120 by year-end.

So you panic sell those 60 shares, thinking, I’ll buy back cheaper later.

🚨 But what if the price never drops low enough?
🚨 What if you have to pay more to buy back in?

Solution: Keep accumulating. If the market dips, buy more shares instead of bailing.

🔹 Emotions Cloud Judgment
Most investors panic at the worst possible time—selling low and buying back higher. Staying invested and dollar-cost averaging keeps you from making emotionally driven mistakes.

🔹 Taxes Eat Into Profits
If you sell for a big gain, you may owe capital gains taxes—especially if you haven’t held for at least a year. That’s money you could’ve kept growing instead of handing over to the IRS.

When Selling Might Be an Option

The exception? Ultra-high-risk stocks.

If you bought 100 shares of a speculative stock at $50, and now it’s at $150, but it’s mostly hype, you might:
✅ Sell a portion (25-50%) to secure some profit.
✅ Reallocate into more stable investments if a recession is coming.

Otherwise, holding long-term is your best bet.

The TL;DR: Market Timing is a Guessing Game

❌ What if it doesn’t drop enough?
❌ What if it drops, but you hesitate and miss the buyback window?
❌ What if you owe huge taxes on your sale?
❌ What if you buy back at a higher price?

There are too many what-ifs—which is why buying and holding high-quality investments is the better long-term strategy.

And remember: Markets have a 100% recovery rate from recessions. If we don’t recover, we’ve got bigger problems than your portfolio.

📌 Final takeaway: Instead of panic selling, take advantage of dips and keep your focus on long-term growth.