Prior studies document that acquisition performance is lower if M&A are undertaken during booming markets. Hence, the timing of the M&A decision is an important channel through which conservatism can improve investment efficiency. We contend that, as conservatism triggers managers to promptly report loss, they will be more reluctant to undertake M&A during booming markets in an attempt to prevent the reporting of negative earnings in the future. Empirical evidence confirms our expectations. We find that more conservative firms are less likely to make M&As during booming markets and the negative effect is more pronounced if firm faces greater agency costs. Moreover, the avoidance of M&A during high-valuation markets leads more conservative firm to exhibit a better acquisition performance than less conservative ones.