Skip to main content
No. of Recommendations: 0
CAVEAT: I do not consider market-timing a wise decision for most folks, including myself. Too much discipline and mental toughness required. Also I am not accusing anyone of 'lazy thinking' such as the excerpted author mentions. I just wanted to add the data table and I included the text for context.
However, I do agree w/the author that the argument about "best xx% of days" is weak because it works both for and against market timing.
Let's get some data logs on this fire, folks.

From at
"I read an article that said timing is a bad idea because if you missed the 40 best days in the market, you would cut your return to about the level of Treasury bills. That's scary!"

"I see that kind of statement in the media from time to time, and they are not only scary, they are misleading and foolish. This is a silly argument that's been around for a long time. It's an easy "score" for lazy critics to capture lazy minds.

"I bet that article didn't tell you what would happen if you were in the market except for the 40 worst days. That would be just as valid, but it would not support the anti-timing point of view.
"No market timing system is designed to avoid only the worst days or the best days, and we've never seen any claim that anybody ever did this. But just for fun, we decided to study the month-by-month returns of the Standard & Poor's 500 Index over a 50-year period. Here is a table that shows what we found:

1949-1998 1,000 grew to CRR*
All 600 months..........$579,039......12.8%
Exclude best 10 months..$181,832......10.5%
Exclude best 20 months..$.78,998.......8.8%
Exclude best 30 months..$.37,979.......7.3%
Exclude best 40 months..$.19,541.......6.0%
Exclude worst 10 months.$.1,912,206......15.2%
Exclude worst 20 months.$.4,101,879......16.8%
Exclude worst 30 months.$.7,457,207......18.0%
Exclude worst 40 months.$12,608,300......19.0%
*Compound rate of return"

"Timing is everything", if you are (un)lucky enough.

Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.