Daniel Shrimski: Why staying invested matters more than timing the market
Periods of market volatility have a way of making long-term plans feel suddenly uncertain. Yet the instinct to act can be more damaging than the downturn itself, particularly when investors attempt to predict both the right moment to exit and the right moment to return.
For Daniel Shrimski, Managing Director, Asia Pacific at Vanguard, the central challenge is not finding a perfect forecast. It is maintaining the discipline to stay invested when short-term conditions become uncomfortable.
"It is so hard to predict what markets are going to do. Again, the experts struggle, people that get paid struggle," Shrimski says on CEO: Behind the Scenes.
The problem with market timing is that it demands two successful decisions. Investors must know when to sell, then identify when to buy again, all while markets are being influenced by an unpredictable combination of economic, political and behavioral forces.
"When you sell out, if you can’t sort of display that behavior, if you do focus on timing and you sell out, you’ve actually got to get it right twice. You’ve got to know when to sell out, but you’ve also got to know when to buy in," he points out.
That difficulty places investor behavior at the center of long-term performance. Rather than reacting to each period of instability, Shrimski advocates for a strategy built around low costs, diversification and the willingness to remain focused on the original objective.
"The psychology, the behavior of staying the course, is way more important than trying to get the timing right," he says.
Staying invested, however, does not mean ignoring risk. Shrimski argues that exchange traded funds (ETFs) can help investors spread that risk while retaining exposure to the potential long-term benefits of capital markets.
"The psychology, the behavior of staying the course, is way more important than trying to get the timing right."
"An ETF is a diversified investment. Again, you can go and buy the ASX 300 via an ETF, where you’re essentially buying 300 individual stocks through one ETF product," he explains.
The harder test arrives when markets become unsettled. During those periods, confidence depends not only on investment knowledge but also on trust, which Shrimski believes must be developed well before volatility appears.
"It’s not about building trust when things get shaky, it’s about doing it all the time, so that when things do get volatile, you’ve got that trust already," he says.
For investors, the lesson is equally consistent: temporary uncertainty should not automatically overturn a long-term strategy. Markets will fluctuate, but reacting to every movement can turn short-term discomfort into a permanent decision.