11/04/2026
Have you ever wondered why the stock market starts going up while the news still looks terrible?
It feels counterintuitive. Our instincts tell us to wait for the “all-clear” signal—to wait until the crisis is over and things feel safe again. But as the data in this chart shows, waiting for safety is often the most expensive decision an investor can make.
So, why does this happen? Why do markets “bottom out” while we are still in the middle of a crisis?
Here is the simple breakdown:
1. Markets Look at the “Windshield,” Not the “Rearview Mirror”
While the news reports on what happened yesterday (the crisis), investors are betting on what will happen six months from now. The market is a “forward-looking machine.” It starts recovering the moment it sees a path to improvement, even if that path is still months away.
2. The Point of “Maximum Pessimism”
Prices usually hit their lowest point when the news is at its absolute worst. Why? Because by then, everyone who was going to sell has already sold. When there’s no one left to sell, even a tiny bit of “less bad” news can send prices soaring.
3. The Cost of Waiting
Look at the COVID-19 Crash in the table. The market bottomed in March 2020, but the crisis didn’t “end” until November. If you waited for the end of the crisis to invest, you would have missed a massive 98% return from the bottom.
Success in investing isn’t about avoiding the storm; it’s about recognizing that the sun starts to peek through while it’s still raining.
