How Trying to Time the Stock Market Destroys Your Wealth
If you invest in stocks, you probably dream of correctly timing the market.
Who wouldn’t want to know exactly when to buy shares just before they soar or to sell them just before they plunge?
But study after study shows that timing the market successfully over the long haul is nearly impossible.
Even worse, trying to guess the direction of the stock market can be downright disastrous to your efforts to build wealth.
A new study from J.P. Morgan Asset Management illustrates the danger of a failed market-timing strategy.
The analysis looked at a 20-year period — Jan. 1, 2002, through Dec. 31,
2021 — and determined how much a $10,000 investment in the S&P 500 stock market
index would have grown based on whether an investor remained fully invested throughout those years or tried to sell out during low periods.
And missing even a handful of those days can have an incredibly negative impact on a portfolio.
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