Fact: If you invested $10,000 in 1996 in the S&P 500, at the end of 2015 you'd have $48,230.
Question: From 1996 to 2015 there were about 5,000 trading days. If you missed the best 10 days, how much would you have at the end of 2015 instead?
Cue jeopardy music….
Got an answer?
Write it down….
You would have $24,070 today!
As Ripley would say - Believe It or Not - if you were out of the market for just the best 10 days out of 5,000 your return is cut in HALF!
So the question you have to ask yourself is do you think you can predict when those 10 days are over the NEXT 20 years? Unless you've got a DeLorean with a Flux Capacitor sitting in your garage, the answer is…probably not.
So why would you ever risk missing those 10 days by being out of the market?
It's not the timing OF the market, but time IN the market that's important.
P.S. 6 out of those best 10 days came within 2 weeks of the 10 worst days, which is usually when people had run for the hills and gotten out of the market.