The impact of missing just a few of the market’s best days can be profound. How to understand market timing is explained below. Take a look at the following example of a hypothetical investment in the stocks that make up the S&P 500 Index.
A hypothetical $1,000 turns into $138,908 from 1970 through the end of August 2019.
There’s no proven way to time the market—targeting the best days or moving to the sidelines to avoid the worst. History argues for staying put through good times and bad.
Investing for the long term helps to ensure that you’re in the position to capture what the market has to offer.
The missed best day(s) examples assume the following:
Annualized returns for the missed best day(s) were calculated by substituting actual returns for the missed best day(s) with zero.
Past performance is no guarantee of future results.
Douglas Finley founded Finley Wealth Management, a Fee-Only Registered Investment Advisor, with the goal of creating a firm that eliminated the conflicts of interest inherent in the financial planner – advisor/client relationship. The firm specializes in financial planning and investment management for high-net-worth individuals and families.
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