Market crashes are investors worst nightmares, but there’s a surprising truth you may not know.
Ready to learn one of the most crucial lesson in the world of investing: missing the worst days in the market can cost you big time. It’s counter-intuitive but true.
Picture this: you’re navigating the ups and downs of the stock market, trying to time your moves just right. But here’s the catch — if you’re not in it for the long haul, you might end up missing out on some of the most significant gains.
You see, there’s a wealth of evidence suggesting that market timing is no walk in the park. In fact, it’s more like navigating a maze blindfolded. Often, investors end up selling too early, missing out on those juicy market rallies. The best time to be investing is during market crashes.
And let me tell you, it can be downright nerve-wracking to invest when all you see are those flashing red warning signs. But here’s the kicker: staying the course, riding through the highs and lows, has proven to deliver some pretty competitive returns, especially over the long haul.
Disclaimer: This is not financial advice and your are responsible for your own investment decisions. When investing capital is at risk.
Missing The 10 Best Days Of The Market
Let’s break it down with a little story from the annals of finance: over the past 15 years, if you happened to miss just the top 10 best days in the market, you could’ve said goodbye to a hefty chunk of your returns. Yep, you heard me right — half of your returns could’ve vanished into thin air.
It gets even crazier. Miss the 40 best days? Well, that could’ve turned your average annual gain into a downright loss. Ouch.
Oh, and it gets worse, my friends. Miss 60 of the best days, and you’re staring down the barrel of a whopping 93% loss compared to if you had just stayed the course. Yeah, you heard me right. That means being invested during market crashes improves the chances of positive returns.
Why Is Timing The Market So Difficult?
So, why is timing the market such a tough nut to crack? Well, for starters, some of the best days happen smack dab in the middle of bear markets.
Talk about counterintuitive, right? And here’s the kicker: many of those best days come hot on the heels of the worst days. It’s like a rollercoaster ride, but with your investments.
If you had bailed out before or during the worst days, guess what? You’d miss out on the best ones too! Take a peek at how closely they huddle together. In 2008, we saw wild swings in the market. Imagine missing the best days like October 13th, when the S&P 500 surged by 11.58%. If you panicked after the 8.81% drop on September 29th and stayed out, you’d miss out on the rebound.
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Staying Invested Is Critical To Success
So, what’s the takeaway? Trying to time the market is like trying to catch lightning in a bottle — it’s a risky game with high stakes. Instead, focus on the long game, stay diversified, keep those fees low, and don’t let taxes sneak up on you.
Timing the market is tricky – missing the best days can significantly impact returns. Remember, it’s time in the market, not timing, that counts. Stay diversified and focused on the long term.
Remember, my friends, the market may be volatile, but the key to success lies in staying steady and playing the long game. Don’t let FOMO or market madness sway you from your path to financial freedom.
How To Get Started With Investing In The Stock Market
It’s hard to know what the best investments for your future are and it can seem overwhelming to make an informed decision. Here are some useful tools & guides to help you get started:
- 8 Index Funds that make my shortlist. Capital at risk.
Download my favourite investment app.Lightyear Appcan also earn you to 4.50% interest earned on uninvested cash. Capital at risk.
Selecting a portfolio that is right for you is key check out5 balanced fundsor5 defensive funds.
Check out my Financial Freedom Calculator(Microsoft Excel)
Download myFinancial Independence Planner(Google Docs)
