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A Reminder About Market Timing And Stocks

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Everyone says trying to get in and out of the stock market is unwise, but this bar chart makes clear why.

Missing the 10 best days in of every decade since 1930 through the end of 2021 would have resulted in a total return of 60%, while staying in the Standard & Poor’s 500 index for the entire 91 years would have resulted in a total return of 21,120%.

To be clear, missing the 10 best days in the stock market every decade in the 91-year period ended in 2021 resulted in a fraction of the return of staying in stocks, as measured by the S&P 500.

“Markets can snap down or snap back so fast and so unpredictably, that even if you have a good sense of where the market is going, it is extraordinarily difficult to get the timing right,” says financial historian Mark J. Higgins. “And, you have to get it right twice, once on the way out and once on the way in.”

At this moment in financial history, with stocks in a bear market and widely expected to drop further in the months ahead, this is a reminder that trying to time stock market peaks and troughs is unwise.

Nothing contained herein is to be considered a solicitation, research material, an investment recommendation, or advice of any kind, and it is subject to change without notice. Any investments or strategies referenced herein do not take into account the investment objectives, financial situation or particular needs of any specific person. Product suitability must be independently determined for each individual investor. Tax advice always depends on your particular personal situation and preferences. You should consult the appropriate financial professional regarding your specific circumstances.
The material represents an assessment of financial, economic and tax law at a specific point in time and is not intended to be a forecast of future events or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete, and is not intended to be used as a primary basis for investment decisions.
This article was written by a professional financial journalist for Advisor Products and is not intended as legal or investment advice.


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This article was written by a professional financial journalist for Pacific Crest Financial Advisors, LLC and is not intended as legal or investment advice.

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