Nov 9, 2026 · 54 min
Waiting for a crash can quietly shrink long-term wealth
Should You Wait for a Crash to Invest? (The Cost of Sitting in Cash)
The episode separates sensible cash reserves from market-timing decisions that can sacrifice compounding, recovery gains, and the market’s strongest days.
- 1Research reviewed here generally favors investing promptly over waiting indefinitely for a pullback or crash.
- 2Missing a small number of the market’s best days can materially reduce long-term wealth.
- 3Cash suits emergencies and near-term spending, but not predictions about when markets will decline.
Don't miss
Andrew’s three-year, $100,000 case study shows that waiting for a subsequent 20% decline can still leave the delayed investor behind.
The brief
Andrew frames the familiar temptation to move money into cash after market highs or alarming headlines, then asks how many timing decisions investors must get right.
A Schwab hypothetical-investor study finds that imperfect investing still substantially beats remaining in Treasury bills, making never investing costlier than mistiming.
Citi research and a three-year, $100,000 example show why even a successful 20% pullback may not recover the opportunity cost of waiting.
The episode connects all-time highs, the COVID crash, and J.P. Morgan’s best-days research to one problem: timing both exits and reentries.
Andrew’s conclusion is practical rather than predictive: automate long-term investing, use dollar-cost averaging if needed behaviorally, and reserve cash for real short-term needs.
Books & mentions
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