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Market Timing Mistakes

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Hello, my name is Jeremy Finger with Riverbend Wealth Management, welcome.

 

Today, we're going to learn a little bit about Market timing and the perils of it. It is by far one of the biggest causes of investor mistakes. Take a look at the slide here. If you invested $100 from 1998 to 2018 in the S&P 500, your average annual return would have been over 7%. Your $100,000 would have grown to over $400,000. But if you miss just 10 of the best days, just 10 days out of 20 years, your return drop in half to just under 4%, costing you over $200,000. I had a friend of mine say, well, Jeremy, what about if we miss the worst days too. Got a good point. The thing is, the worst days and the best days usually happen very close together. In 2008, in September, October, November, December, all had some very bad days, but they all had some very good days, very close together,okay? So the thing to do is to make sure you stay invested.

Well, is that all I need to do? No. First, make sure you have a plan and you have some type of goal that you're trying to accomplish, whether it be retirement or what it was just going to use for. Number 2, making sure that your investments are designed in such a way to help you achieve those goals. Number 3, have a game plan that you can rely upon when markets do get sideways. This helps alleviate some of the anxiety and stress, because usually when we have anxiety and stress, we may end up making poor decisions. Ok, so let me know what you think. My contact information is in the description below. Give me a call, send me an email. I hope all is well with you and have a great day.