Stock Market since 1980. Summary: Don't try to time the market

[tubby_mcgee 686]

So...for the past 37 or 38 years (since about 1980).

 

Guess what your annual rate of return would be in the stock market?

 

11.5%.


Now...take out/remove the 40 best days (%) that the market has had....only the 40 best days...out of the past approximately 6500 days....pretend they never happened.

 

Guess what your rate of return would be?

5.5%

Digest that for a bit.

[Alias Detective 1,179]

So...for the past 37 or 38 years (since about 1980).

 

Guess what your annual rate of return would be in the stock market?

 

11.5%.

Now...take out/remove the 40 best days (%) that the market has had....only the 40 best days...out of the past approximately 6500 days....pretend they never happened.

 

Guess what your rate of return would be?

5.5%

 

Digest that for a bit.

 

Great advise when in accumulation mode. However, more people die coming down from Mt. Everest than climbing.

[bandrus1 413]

Very interesting statistic tubby

[tubby_mcgee 686]

Great advise when in accumulation mode. However, more people die coming down from Mt. Everest than climbing.

 

 

My headline/topic was advice. The verbiage you quoted me on, was fact.

 

Nothing to misconstrue or twist.

 

So not sure what you are getting at. You have to be in "accumulation mode" at some point.

[MTSkiBum 1,593]

What if you removed the 40 worst days what would your rate of return be.

[IGotWorms 3,297]

Yup you gotta get invested in low cost index funds and just ride it out for decades. Everything else is trying to take a shortcut thatll just set you back 99% of the time

[tubby_mcgee 686]

What if you removed the 40 worst days what would your rate of return be.

 

 

I don't know...but I think the point they were trying to make, was that with overall investing, don't worry about trying to time the market. Even if we leave the 40 worst days in the formula...we are fine. We just can't take out the 40 best days (you can't afford to miss the 40 best days). Those 40 best days are about as important as the other 6400 days.

 

A buddy of mine that is a financial advisor for Edward Jones said they get these information sheets prior to going on conference calls with corporate or something...and there was a blur on that--so that's where I got that info I posted originally.

 

I'm not arguing, only trying to decipher what they were getting at. I googled to try to find the same info...and here is what I found. Same premise, talks about best and worst days, etc.

https://www.ifa.com/12steps/step4/missing_the_best_and_worst_days/

[parrot 789]

Huh, it seems like that would be an argument FOR timing the market, like get in right before one of those days.

[tubby_mcgee 686]

Huh, it seems like that would be an argument FOR timing the market, like get in right before one of those days.

 

Okay, well, just let me know when.

[parrot 789]

 

Okay, well, just let me know when.

 

No one said it would be easy.

[Bert 1,087]

Yup you gotta get invested in low cost index funds and just ride it out for decades. Everything else is trying to take a shortcut thatll just set you back 99% of the time

[Patriotsfatboy1 1,432]

Huh, it seems like that would be an argument FOR timing the market, like get in right before one of those days.

 

Right. Your rate of return would be double if you could time out those 40 days.

[LOD01 185]

I've researched this. The largest gains in the markets theory is a really weak theory when you look at what days those were. 2008 has a lot of them. Many of the gains were lost days later. The largest one on 10/13/2008 was lost plus another 13% before bottoming. So it shouldn't even count unless you bought at the end of that day.

 

It's not easy but I've been doing this for a few years. This year I am 12% above the nasdaq in one account, 7.8% in another and 1.6% above in the 3rd account. It requires volatility in the markets to do this though. 3rd account had issues with jumping in and out which I have since figured out.

 

The idea that does work is selling one day and if there is a 1% drop while you are out, get right back in and you are 1% ahead of everyone else. I've done it twice this year and the gains were much better because #1. I was already beating the markets before these latest 2 selloffs so I got greedy & waited longer than 1 day and #2. You need these 'correction' level events. Any other time, just stay in. You have to look at it like saving 1% or more instead of saying if I get back in it may lose more. If you stayed in you would have lost that $ anyway.

[edjr 5,547]

You don't say.

 

Are you saying I shouldn't have spent 4 grand on Crypto in January 2018?

[DankNuggs 305]

Its that the Dow or the overall market?

[LOD01 185]

Its that the Dow or the overall market?

S&P which is a better gauge but also DOW since they all move together. 2nd biggest for NAZ since 1980 is 10/13/2008 because the internet stock bubble in 2000 ha one that was larger.

 

https://en.wikipedia.org/wiki/List_of_largest_daily_changes_in_the_Dow_Jones_Industrial_Average

 

https://en.wikipedia.org/wiki/List_of_largest_daily_changes_in_the_S%26P_500_Index

 

https://en.wikipedia.org/wiki/List_of_largest_daily_changes_in_the_Nasdaq_Composite

 

I'm now in 100% for a while. Once I get the lead on the markets for the year, i don't give it up. I do my best to follow Elliot waves in making my decisions.

[Patriotsfatboy1 1,432]

Buy low, sell high.

[IGotWorms 3,297]

 

Right. Your rate of return would be double if you could time out those 40 days.

Try it and report back

[Patriotsfatboy1 1,432]

Try it and report back

 

I am a billionaire, with a 12" c0ck, a supermodel wife and I always win at poker and FF. Timing the stock market is focking easy.

[IGotWorms 3,297]

 

I am a billionaire, with a 12" c0ck, a supermodel wife and I always win at poker and FF. Timing the stock market is focking easy.

You are poor/small cack/hourglass figure wife shaming me!

[tubby_mcgee 686]

Its a good thing I funded my SEP for 2017 ............yesterday.

[Hardcore troubadour 12,576]

So Facebook loses 14b in one day and barely a ripple in the market? Smells fishy to me, not that I know what I'm talking about.

[edjr 5,547]

Take away Nomar Garciaparra's worst 30 games in 2000, he hit .457 and had a 110 game hitting streak,