http://awealthofcommonsense.com/worlds- ... ket-timer/
Bob makes all his stock purchases at historic high points over the past 40 years.
Bob is the world’s worst market timer.
What follows is Bob’s tale of terrible timing of his stock purchases...
..Bob was a terrible market timer with his only stock market purchases being made at the market peaks just before extreme losses.
Here are the purchase dates, the crashes that followed and the amount invested at each date:
Luckily, while Bob couldn’t time his buys, he never sold out of the market even once. He didn’t sell after the bear market of 1973-74 or the Black Monday in 1987 or the technology bust in 2000 or the financial crisis of 2007-09.
He never sold a single share.
So how did he do?
Even though he only bought at the very top of the market, Bob still ended up a millionaire with $1.1 million.
Lessons from Bob’s Journey:
If you are going to make investment mistakes, make sure you are biased towards optimism and not pessimism. Long-term thinking has been rewarded in the past and unless you think the world or innovation is coming to an end it should be rewarded in the future. As Winston Churchill once said, “I am an optimist. It does not seem too much use being anything else.”
Losses are part of the deal when investing in stocks. How you react to those losses is one of the biggest determinants of your investment performance.
Saving more, thinking long-term and allowing compound interest to work in your favor are your biggest accelerants for building wealth. These factors have nothing to do with picking stocks or a complex investment strategy. Get these big things right and any disciplined investment strategy should do the trick