Is Now a Good Time to Invest? Let the Evidence Guide You

Investors often find themselves paralyzed by uncertainty. National debt headlines, inflation fears, market volatility, and Fed decisions can leave even seasoned investors wondering: Is now really a good time to invest?

At Pathworks Financial, we believe clarity comes from evidence, not emotion. Drawing from Dimensional Fund Advisors’ analysis, here’s what the data tells us.

1. High National Debt ≠ Poor Market Performance

While rising national debt grabs headlines, the historical relationship between government debt and stock market returns tells a different story. Since 1975, many developed countries have experienced strong stock performance—even with high debt-to-GDP ratios. In short, markets have the resilience to thrive despite fiscal pressures.

2. GDP Growth Isn’t Everything

You might assume that higher GDP growth means higher stock returns. The reality is more nuanced. From 1975 to 2023, countries with both high and low GDP growth delivered long-term stock market gains. While economic growth supports investor confidence, market pricing already reflects expected growth. Surprises—both good and bad—are what move markets.

3. Inflation: A Temporary Storm, Not a Permanent Forecast

In June 2022, inflation peaked at 9.1%. Fast forward to March 2025, and it has cooled to 2.4%. Though inflation creates short-term discomfort, it doesn’t permanently derail long-term investors. Historical data shows that stock returns often outpace inflation over time, preserving and even growing purchasing power.

4. Don’t Bet Against the Fed—But Don’t Obsess Over It Either

Yes, interest rates matter. But history shows that Fed rate hikes or cuts do not consistently predict long-term bond or equity performance. In fact, in over 60% of rate-cut months since 1983, 10-year Treasury yields actually declined—a reminder that markets price in expectations quickly and often counterintuitively.

5. Volatility Is the Price of Admission

Market drops are inevitable. From 1940 to 2025, some of the worst two-day declines were followed by some of the biggest one-day gains. Trying to time these swings is not only stressful—it’s statistically unproductive.

6. The Perils of Market Timing

If you had perfect foresight and only invested in the best-performing asset each year, your $10,000 in 1926 would be worth nearly $26 billion today. But miss just a few of the best days in the market, and long-term gains shrink dramatically. Staying invested, rather than trying to predict the unpredictable, is the more reliable path to growth.

7. The Wisdom in Staying the Course

Economic data, political shifts, and news headlines will always introduce uncertainty. But the markets have rewarded disciplined, long-term investors—those who stay invested, ignore the noise, and lean on a structured, evidence-based approach.

At Pathworks, we help our clients filter out fear and focus on the long game. Whether the market is soaring or stumbling, we apply a consistent framework rooted in decades of academic research and real-world outcomes.

If you're wondering "Is now a good time to invest?"—history suggests the best time to invest is when you have a plan. And the best plan is one that doesn't rely on predictions, but on principles.