> The stock market will always recover because people are always going to want to make money.

Maybe.

SPY closed at ~$145 in June 2000

SPY closed at ~$80 in October 2002

SPY closed at ~$145 in July 2007

SPY closed at ~$75 in March 2009

SPY closed at ~$145 in December 2012

Nothing but dividends for a decade or so unless you did some clever selling high and buying low.

It's been mostly up since 2012, but there is no guarantee it is up from here in 2030.

This is only true if you choose the worst case scenario. If you bought SPY in almost any random day since 93 you could have sold it with profit without having to wait too much. On the worst case you had to wait for 5 years or so, but that wasn't a surprising situation.

According to the example you gave (which isn't the fairest, since you started at June 2020, which is the peak of the Internet bubble), the stock market still did manage to recover. It took 12 years but it did recover, and now SPY is just 2x of $145.

There’s not a perfect investment out there, so the real question is what beat equities over that time span?

You have to do something with your savings. “Nothing but dividends” over 10 years still beats the heck out of holding cash over that period of time, for example.

That is why you don't try to time the market and just put in the same amount every month. The overall trend has been up for the past 100 years, and ignoring dips that are always temporary, this is true on smaller time scales as well.

That what I am doing just putting £1500 or so every month into my ISA and learning to live with the big up and downs on a daily basis.

Keep in mind that those dividends would give you a ~20% gain (although probably offset by inflation)

I agree with your point, but your numbers don't accurately reflect total-return (ie. include dividends).

The peak (aka trough) was about six months after the start, so if you want to try this strategy it is important to have patience and not rush in too soon.

This sounds an awful lot like the logic that makes people get into multi-level-marketing schemes...

Yeah but the stock market isn't 50% off right now. It's bounce back is temporary and most people should hold cash right now until we really start to see blood in the streets.

It's a game of chicken. Everyone is waiting for other people to sell which will make prices fall so they can buy the dip.

This would be a sound theory if the fed weren't printing money.

The fed, however, is more interested in preventing deflation and/or complete economic collapse, than it is in rewarding prudent investers.