Think You Can Time the Market?

Here’s a fact that ought to make you think twice before trying to “time” the stock market. Since 1950, the S&P 500 is up over 73-fold (excluding dividends). That’s a period of over 14,000 trading days. However, when you isolate the best 133 days, you get a combined total return of 74-fold. That means that the stock market is flat for 99.05% of the time. The market’s entire profit has been made in just one day in 105, or roughly one day every five months. To time the market profitably, an investor has to hit that bulls eye without ever missing a beat. That’s why the best strategy to buy and hold and never worry about missing that home run day.

Posted by on September 21st, 2005 at 4:01 pm


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