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> However, if you had pulled your money out of the market on the 10 best single days of those 20 years, your return would drop to 4.5%. If you took out the best
by anamax 16y ago
> However, if you had pulled your money out of the market on the 10 best single days of those 20 years, your return would drop to 4.5%. If you took out the best 30 days from the past 20 years, you'd have a 0% return! Imagine that, 30 days out of 20 years, and it would cost you all your gains.
I suspect that the 10 and 30 worst days had comparable effect, albeit in the other direction.
You can't win if you don't play, but neither that nor the dominance of "big win days" implies that you should play every day.
- bluedevil2k 16y agoExactly right. You remove the 10 worst or 30 worst days, your returns would be way above the 8.2% average. The point is, no one knows ahead of time which days will be one of the 10 best, and which will one of the 10 worst. Same thing with angel investors - you don't know which startups will be home runs and which ones will be strike outs. The data suggests you should play every day.