This chart shows why investors should never try to time the stock market


Timing the market is difficult at the best of times for even the most experienced traders.

Now, Bank of America has quantified just how large the missed opportunity can be for investors who try to get in and out at just the right moment.

Looking at data going back to 1930, the firm found that if an investor missed the S&P 500’s 10 best days each decade, the total return would stand at 28%. If, on the other hand, the investor held steady through the ups and downs, the return would have been 17,715%.

When stocks plunge a natural impulse can be to hit the sell button, but the firm found the market’s best days often follow the biggest drops, so panic selling can significantly lower returns for…


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