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The true cost of market timing

Apr 09, 2024

Imagine you had invested 100 USD in 1988 in the US stock market. By attempting to outsmart Mr Market and based on your true market insight, you completely exited the market at certain points. Imagine you got it completely wrong: the cost of missing the best day, the best week, the best month, the best quarter and the best year is substantial. Instead of having a portfolio worth 4302 USD today, your portfolio would indeed only be worth 2605 EUR in the worst case. That shows the cost of market timing if you are not 100% perfect in your short and long term predictions over several decades.

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