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by caminante
4052 days ago
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Putting all of your money in CD's is like overpaying for insurance. Index funds are your friend as you get the market portfolio (important for risk minimization) with minimized costs. WRT "market timing," the lay investor wins by NOT relying on market timing. Even if you think the market will move in a direction, it's impossibly hard to guess when. Don't believe me? Check out this study which shows that missing single days can adversely impact a 20-year holding.[1] In this study, researchers looked at 20 years worth ('95-'14) of daily returns and asked what'd happen if you missed the best days and/or ate worst days. Missing the top 10 days of gains -- out of 5,036 trading days -- cuts your portfolio value in half. Miss 20 days? Your portfolio doesn't move. [1]https://www.ifa.com/12steps/step4/missing_the_best_and_worst... |
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