Q. I’ve been hearing that trying to “time the market” doesn’t work and that if I miss out on a few good days when the market is up, I could miss out on gaining back my portfolio’s value. Is this true?

A. Yes. According to a study by SEI Investments, a wealth management company, investors who cashed out when the market was down, then waited until the market “recovered” to get back in, lost out on double-digit gains. But investors who held on to investments through the last 12 bear markets gained an average of 32.5 percent in the year following the market’s recovery.

The bottom line: Don’t try to time the market. Investment returns are generally made in just a few days out of the year. And the bear market will end when we least expect it.

Source: Bill Losey
Illustration: Mark Zingarelli