In a previous article, I discuss the cost of marketing timing. After reading OppenheimeFunds’ 2018 Compelling Wealth Management Conversations brochure, I wanted to expand upon my thoughts about trying to time the market.
In their chart book, they include the following illustration. They conclude that the best stock market days come near the worst days.
For better context, the S&P 500 was down -38% in 2008. This was the worst performing year during the Great Recession. Despite that, 2008 included 8 of the 20 best price return days for the S&P 500 since 1998.
Thanks to the internet, we live in a world where information spreads like wildfire. In my opinion, the internet increases market volatility. As remote parts of the world become more connected, market fluctuations may become more prevalent. Hence, the importance of long-term investing cannot be overstated.
In my opinion, you should ignore markets, but not ignore investing. This means you should not read too much into day-to-day market fluctuations. Instead, you should focus on how your investments help you toward your financial goals.
Market corrections are inevitable. However, I believe a great financial advisor can help you weather the storm by preventing you from making emotionally driven financial decisions that can negatively impact your financial plan.