The Cost Of Trying To Time The Market
The impact of missing just a few of the market’s best days can be profound. Staying invested and focused on the long term helps to ensure that you’re in the position to capture what the market has to offer.
Written by Patryk Dyjecinski

IFA and Founder of Clara Wealth

The impact of missing just a few of the market’s best days can be profound.  The following example by Dimensional Fund Advisers illustrates a hypothetical investment in the stocks that make up the S&P 500 Index. This shows that staying invested and focused on the long term can help to ensure that you are able to capture what the market has to offer.

  • A hypothetical $1,000 turns into $121,353 from 1970 through March 17, 2020.
  • Miss the S&P 500’s five best days and the return dwindles to $77,056. Miss the 25 best days and that’s $26,989.
  • There’s no proven way to time the market—targeting the best days or moving to the sidelines to avoid the worst—so history argues for staying put through good times and bad.

Missing only a few days of strong returns can drastically impact overall performance.

Clara Wealth Management can you help you set up a saving and investment strategy that you can stick with. Helping you to capture the full market returns.

Click here to find out more about our investment philosophy.
If you want to talk through what is in your portfolio, please contact me at contact@clarawealth.co.uk or on 0207 097 4968.

Past performance is not a reliable indicator of future performance. The value of investments may go down as well as up and you may get back less than you invest. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.

All-Time-High Anxiety

All-Time-High Anxiety

Financial journalists periodically stoke investors’ record-high anxiety by suggesting the laws of physics apply to financial markets—that what goes up must come down. But shares are not heavy objects kept aloft through strenuous effort. They are perpetual claim tickets on companies’ earnings and dividends.