Investing in the stock market: 10 days not to be missed!

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You are in a large closed room. Without clock and window. Unable to find out 15:00 or 2:00. You sit and play, and the beautiful waitresses smile at you when they serve you a drink.

As long as you stay there, you are in the world separately.

Because in the casino everything is designed so that you do not notice how time passes …

For that simple and compelling reason time is its biggest advantage.

“The bank wins the casino every time”

In blackjack, the casino’s advantage over the player averages 4%. In other words, every time you bet 100 euros, the casino wins about 4 euros.

In roulette, this advantage is 5%. And for slot machines it can reach 15%.

You would understand that : The casino is interested in keeping you as long as possible.

Because the longer you stay, the more your chances of losing. This is statistical.

On the other hand, in the case of the stock market, the opposite is true… the longer you stay, the better your chances of making money.

In the stock market, focus on time, not time deadlines

If you had to mention just one thing while reading me today, this would be the following lesson: do not try to predict the market and focus on the long term.

Since 1945, the stock market has grown in 70% of cases. During this period, the world economy grew most of the time.

In other words : The more time you spend in the market, the more you increase your chances of making money.

Keep that in mind! Especially during the corrections and uncertainties in the stock market that we are experiencing. Because selling your position now can make a big mistake.

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Skipping 10 days on the stock market may be enough to split profits by 2

Recently, I came across an interesting chart that studies the behavior of investments in the stock market for the period from 1980 to 2018.

Fidelity Asset Manager has found that if you miss even the best 10 days of market efficiency, your profitability is halved!

Here are the 10,000 euros invested in a tracking S & P500 between 1980 and 2018

On the contrary, if you invested 10,000 euros without touching them between 1980 and 2018, you would earn 708,143 euros…

I insist : in this theoretical case 708,143 euros were received despite severe crises: the collapse of 1987, the bursting of the Internet bubble in 2000-2001 and the crisis substandard from 2008 to 2009, these are just some of them.

Here is another example for another smaller period: from 2004 to 2019.

Again, the numbers show that skipping the top 10 trading days can halve your earnings:

Source: Putnam Investments

And so trying to guess 30% of market failures is a huge mistake …

… And to make you miss these 10 days of promotion!

Wait

Many investors are now trying to leave the market to keep their portfolios and hope to return to lower prices.

But they are only increasing their chances of losing.

Here is another chart that lists the top 25 (green) and the worst 25 daysin red) S & P500 for the period 1990-2018.

Source: Inappropriate investor Michael Batnik

You will notice that the best days often follow the worst trading days.

Thus, going into a bearish period similar to the one we are experiencing now could be a fatal blow to your portfolio.

Because, as a rule, after that we know the greatest increase. And if you miss them, it is almost impossible to catch up with these gains!

Now many investors are panicking. So don’t make mistakes by imitating them. Hold on, because this is the price you have to pay for a high return in the long run.

The shrinking market creates new opportunities

When we identify stock market opportunities, we do so by carefully studying the company’s fundamentals and prospects for the next 10 years.

Areas of stock market turbulence do not change these fundamentals, which remain true despite the short-lived panic.

Now imagine all the opportunities to buy at low prices, which will cause the current market downturn.

In a good relationship!

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