Morgan Stanley isn’t the only major investment firm warning about stocks, with JPMorgan and Goldman Sachs also sounding the alarm. Should investors wait before putting new funds to work?

Maybe not. A mountain of academic evidence confirms market timing is a tricky business. Difficulty aside, timing may not be as important as some investors might believe.

Data from US brokerage Charles Schwab shows that someone who invested $2,000 at the market low each year over the 2001-2020 period would have ended up with $151,391; someone who invested $2,000 over 12 months would have $134,856; and someone who invested $2,000 at the market peak each year would, despite their appalling timing, end up with $121,171. The differences are less stark than one might think, and they all did much better than someone who stayed in cash ($44,438).

Nor was the 2001-2020 period some weird outlier. The rankings are “remarkably similar” in 66 of the 74 rolling 20-year rolling periods dating back to 1926. Staying in cash yielded the worst or second-worst returns in all but two of the 74 periods. The moral: stop agonising and start investing. If you’re perpetually waiting for the best time to invest, you’ll probably underperform even the worst market timer.