By James Purcell, Head of Client Solutions

• Over the past 35 years, investing sooner rather than later has typically produced better outcomes than waiting for a better entry point – as equity markets have generally risen over time.
• Phasing investments over time could reduce the risk of investing just before a downturn, although it has historically delivered lower returns than investing a lump sum immediately.
• Despite a run of record highs this year, we continue to see opportunity within equity markets – underpinned by resilient economic growth, investment in artificial intelligence and solid company performance.

The value of investments, and the income from them, can fall as well as rise and you may not get back what you put in. Past performance should not be taken as a guide to future performance. You should continue to hold cash for your short-term needs. This article should not be taken as advice.

The question of whether or not now is a good time to start investing, or add to existing investments, is a wholly reasonable one. Looking at the FTSE World Index, global equities have risen around 15% in sterling terms in 2026 – as of 9 September – and reached more than 30 all-time daily highs.

While this is positive for existing investors, strong market performance can create concerns that a market selloff may be around the corner.

To understand the potential implications of investing now or waiting, we analysed US equity market data going back to 1990, using sterling-denominated total returns which include both capital growth and reinvested dividends. While history should not be relied upon to forecast the future, it can potentially help us understand equity market behaviour.

We looked at two common approaches: delaying investment by six months and waiting for a market fall of 10% or more.

Our analysis suggests that waiting six months has historically resulted in a less favourable outcome than investing immediately.

The primary reason is straightforward – equity markets have generally risen over time. Delaying investment therefore means spending more time out of the market and potentially missing periods of growth.

Looking across the 35-year period we analysed, waiting six months produced a better result than investing immediately only 26% of the time. On average, investors who delayed by six months missed out on returns of around 6.9%.

We found a similar pattern when examining other time horizons as well, including delays of three and 12 months.

Some investors may prefer to wait for a significant pullback before investing, hoping to buy at lower prices. While such market falls can occur, our analysis suggests that waiting for one has often been less effective than an investor might hope.

Our analysis found that, from any given point over the past 35 years, equity markets subsequently experienced a decline of 10% or more about 42% of the time. But 58% of the time, they went on to reach new highs without first experiencing a fall of that size.

As a result, investors waiting for a particular entry point could have found themselves waiting indefinitely. Markets can continue rising for extended periods, and even when falls eventually occur, they do not always take prices back to the levels available when the decision to wait was first made.

Consider a striking example from September 1990. An investor who chose not to invest and instead waited for the US market to fall 10% below its level at that time would still be waiting today. Although several market selloffs occurred over the subsequent decades, none took the market back to that threshold. By August 2026, that investor could have missed potential returns of approximately 6,500%.

For investors concerned about committing capital at a single point in time, there is another option to consider.

Rather than investing all available capital immediately or delaying entirely, investments could be phased into the market over a series of regular intervals. This approach is commonly known as ‘averaging in’.

The benefit of this approach is that it reduces the risk of investing all capital immediately before a market decline. The drawback is that, if markets continue to rise, some capital remains uninvested and could miss part of the gain.

Using the same historical dataset, we modelled investing equal amounts over a six-month period. On average, throughout the 35-year period, this approach resulted in returns around 3.1% lower than investing the full amount immediately. However, it also reduced the likelihood of experiencing particularly strong or particularly weak outcomes.

For some investors, that trade-off may be worthwhile. While averaging in may slightly reduce expected returns, it could provide greater comfort during periods of uncertainty.

Market headlines will always create reasons for caution. Periods of uncertainty, geopolitical tensions and concerns about valuations are a normal feature of investing.

At Coutts, our investment approach focuses on long-term economic fundamentals rather than short-term market movements. We assess factors including economic growth, inflation trends, corporate earnings and policy developments when determining portfolio positioning.

Despite the fact that equity markets have reached many new highs this year, we continue to see support for the asset class from resilient economic growth, ongoing AI-related investment and healthy corporate profitability.

We reduced the size of our equity overweight relative to bonds in June following central bank signals that interest rates could remain higher for longer. And we continue to monitor financial conditions and corporate investment trends closely. But we believe equities remain an important component of a well-diversified portfolio.

History suggests that attempting to identify the perfect moment to invest can be difficult, and the greater risk could be waiting too long rather than investing too soon.