It’s a simple answer fortunately. We stay invested; we don’t get out one day and get back in the next. And we have a good reason why, too. We know we can’t predict if the DOW will be down 875 points over two days only to bounce back 650 points the next day (this happened the last three trading days). If we stay invested every day, we’ll get the good with the bad, and over the long-run, owning stocks give us more good than bad. But if we try to pick when to be in the market or out of it, we can see how extremely hard it is to actually outperform being invested every day.
Take a look at this attachment or what is pasted below courtesy of IFA.com. 20 years of S&P 500 returns were analyzed, and the findings were: missing just a handful of days of returns drastically impacted returns. We’re just not going to consistently guess right and avoid the losing days, but if we try, we subject ourselves to missing the good days, too. And even just missing the 5 best days OUT OF OVER 5,000 days took the return from 9.22% down to 7%.
The moral of the story is: stay invested every single day and grab the market’s return, over time it’s a good return and it will build wealth for your retirement portfolio. But when you play the market timing game, the odds aren’t in your favor that you’ll consistently guess right, and when it comes to your retirement you don’t want it to be a guessing game.
Take a look at this attachment or what is pasted below courtesy of IFA.com. 20 years of S&P 500 returns were analyzed, and the findings were: missing just a handful of days of returns drastically impacted returns. We’re just not going to consistently guess right and avoid the losing days, but if we try, we subject ourselves to missing the good days, too. And even just missing the 5 best days OUT OF OVER 5,000 days took the return from 9.22% down to 7%.
The moral of the story is: stay invested every single day and grab the market’s return, over time it’s a good return and it will build wealth for your retirement portfolio. But when you play the market timing game, the odds aren’t in your favor that you’ll consistently guess right, and when it comes to your retirement you don’t want it to be a guessing game.
