The idea of trying to "time" the market - of trying to get in before it goes up, and get out before it goes down - has a terrible reputation. The idea of trying to time buying an indexed annuity where your principal is protected and your starting point for calculating returns on the S&P value resets every year or two is an even worse idea. I had a recent conversation with a potential client who said "I'm going to wait until the market corrects before I make this purchase assuming I have the cash available to do it when it happens". I hung up the phone and scratched my head and thought, you are going to wait until you lose money to purchase a product that will offer you downside protection? Know one can successfully predict the direction of the market, not even the "experts", so what makes you think you can?
Timing "is a wicked idea - don't try it, ever," wrote Charles Ellis, one of the leading lights of indexing, many years ago. According to conventional wisdom, any attempt to time the market is fundamentally flawed. Stock markets follow a 'random walk', they say. No one can predict the market's next move, so trying to do so will end up costing you money. A lot of your long-term gains will come from a few big "up" days, and these are completely unpredictable - if you are out of the market when they happen you will miss out on a lot of profits.
Yes, most people who try to time the market end up screwing it up - they buy and sell at the wrong times because they quite frankly aren't equipped to make an non emotional decision with regards to the discipline. At the end of the day, the number one thing you must keep in mind is why are considering exiting the market for safer territory and in the case of the indexed product, you win either way. If the market continues to run... you win! If the market adjust downward... you win because you won't lose a dime and the good news is that you will actually make money on a rebound rather than waiting for your account value to just get back to where it was previously.
Bottom line.. know one can time the market on the upside or downside. You shouldn't attempt it in your equity portfolio and certainly should not be a factor in purchasing a product with principal protection.