Have you ever had bad timing? Like when you were in Europe visiting your grandpa’s friends and they insisted on kissing you on the cheek and missed.
EWWW! (Clearly, this has NEVER happened to me before!)
Although, there is one place where timing isn’t everything. When investing for the long term, in a well diversified portfolio, timing the markets is virtually hard to do. and why this old adage is true – maybe you’ve heard it before:
It’s not timing the markets, it’s TIME IN the markets that counts!
So, let’s back up this advice with some proof.
Take a look at this lovely little chart:
Here’s what that chart is saying:
If you dumped your money into the TSX Composite and left it over the last ten years and walked away, you would have had a 6.6% return.
If you tried timing the market, and missed the best 10 days of 3,652 days you would have instantly reduced your return to zero.
If you missed the best 20, 30 or 40 days of the market your return would plummet into the negative abyss.
BOTTOM LINE: When looking at a well diversified portfolio or even a broad ETF, your best bet is to stay in for the long run and not try to hop in and out like individual stocks, because no one can predict the best days of any market.
