Skipping a Few Days Can Wreck Your Wealth

We've had a few questions about what we mean by "timing the market."

In the world of investing, timing the market is when we try to buy on dips, and sell on rallies. Sounds ideal, right?

It's not ideal if you miss the best days.

Here's why it's better to "close your eyes and buy":

 Recent research shows the power of staying invested.

Recent research shows that missing just a handful of the market's best-performing days can drastically affect your portfolio.

As you can see, this investment would have grown sixfold if the investor simply stayed invested.

If they missed the ten best days, they would have lost 50%.

Missing the 60 best days would have cost them an astonishing 92%.

Missing the 40 best days puts them in negative territory.

This highlights an important point: often the market's biggest days are unpredictable and may come when uncertainty is at its peak, just when investors may be likely to pull back.

For most investors, it's best to stick with an asset allocation plan that matches their risk tolerance and to review it periodically, rather than reacting to every market swing.

"It's time in the market, not timing the market" that matters.
-Warren Buffett 

The bold takeaway? Embrace volatility. Be diversified. Trust your strategy. Avoid the temptation to time the market. Stay invested, and as long as you have time,

When it comes to growing wealth, patience and consistency are some of the most powerful tools in your investment toolbox.