REVIEW: The Inspiring Story of the Worst Market Timer Ever

How would someone fare if they were the worst market timer ever? Probably pretty poorly. But what if after they bought right before some of the worst market downturns ever, then never sold? Well, it turns out they actually wouldn’t do too badly for themselves.

The author imagines an investor that started putting money into the S&P 500 Index[1] at the beginning of 1973, right before the index dropped 48%. And then the hapless investor put money in at the beginning of September 1987, when the market fell 34%. Their luck kept getting worse and they invested right before the 2000 and 2007 crashes. After all of that this investor still made money. The reason they were able to make money is that they never sold anything. Even though they invested into some of the biggest declines the market has seen, they were able to stay the course. Imagine if they were consistently saving throughout the whole period.

The key here is that you need to understand what your time horizon is, and build appropriately. This unlucky investor was able to come out ahead because they were working with an extremely long time period. It wouldn’t have worked out so well if they were going to use the money in the next couple of years.

[[1] Indices are not available for direct investment.]

The content of this publication reflects the views of McLean Asset Management Corporation (MAMC) and sources deemed by MAMC to be reliable. MAMC is a SEC registered investment adviser. There are many different interpretations of investment statistics and many different ideas about how to best use them. Past performance is not indicative of future performance.
The information provided is for educational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy or sell securities. There are no warranties, expressed or implied, as to accuracy, completeness, or results obtained from any information on this presentation. The information throughout this presentation is obtained from sources which we, and our suppliers, believe to be reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. Neither our information providers nor we shall be liable for any errors or inaccuracies, regardless of cause, or the lack of timeliness of, or for any delay or interruption in the transmission there of to the user. MAMC only transacts business in states where it is properly registered, or excluded or exempted from registration requirements. It does not provide tax, legal, or accounting advice.

The information contained in this presentation does not take into account your particular investment objectives, financial situation, or needs, and you should, in considering this material, discuss your individual circumstances with professionals in those areas before making any decisions.

 

McLean Asset Management Corporation (MAMC) is a SEC registered investment adviser. The content of this publication reflects the views of McLean Asset Management Corporation (MAMC) and sources deemed by MAMC to be reliable. There are many different interpretations of investment statistics and many different ideas about how to best use them. Past performance is not indicative of future performance. The information provided is for educational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy or sell securities. There are no warranties, expressed or implied, as to accuracy, completeness, or results obtained from any information on this presentation. Indexes are not available for direct investment. All investments involve risk.

The information throughout this presentation, whether stock quotes, charts, articles, or any other statements regarding market or other financial information, is obtained from sources which we, and our suppliers believe to be reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. Neither our information providers nor we shall be liable for any errors or inaccuracies, regardless of cause, or the lack of timeliness of, or for any delay or interruption in the transmission there of to the user. MAMC only transacts business in states where it is properly registered, or excluded or exempted from registration requirements. It does not provide tax, legal, or accounting advice. The information contained in this presentation does not take into account your particular investment objectives, financial situation, or needs, and you should, in considering this material, discuss your individual circumstances with professionals in those areas before making any decisions.

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