It seems that Liz Ann Sonders, Chief Investment Strategist at Charles Schwab and Co. saw the same Dalbar report I mentioned yesterday. She crafted an article for Schwab’s quarterly client magazine On Investing titled “Market Timing Doesn’t Work” in which she offers additional data, such as; If you missed the top 40 best single market days (less than 1.6% of trading days) over the past 10 years, your annualized return plunged to -6.4% versus the S&P 500’s +8.4%. She adds that nearly 30 of those best 40 days came within two weeks following a worst market day.
The problem with market timing, as I’ve stated before, is you need to be right twice, first bailing out, and then knowing when to get back in. As John Bogle has been quoted, “After nearly 50 years in the business, I do not know of anybody who has done it [market timing] successfully and consistently. I do not even know anybody who knows anybody who has done it successfully and consistently.