The Economy

[Mr. Bloom]

As for riding it out, I haven't bought into that idea. Why not dump it and wait until it drops then buy it back?

Smilingcat, I hear ya'. The problem with "market timing" is it assumes that you are sitting on top of the market to execute your moves perfectly. This is far from reality for anyone but a floor trader.

I'll let you do the math (importing daily data on the Dow from YahooFinance into an excel worksheet). I just did this and here's what it reveals:

50 Years Ago, On 7/7/1958, the Dow was at 481.85. Yesterday, it closed at 11,288.53.

In the last 50 years, the 10 single largest DAILY gains were:
Date

10/15/2002- 4.80%
7/29/2002- 5.41%
7/24/2002- 6.35%
3/16/2000- 4.93%
9/8/1998- 4.98%
10/29/1987 - 4.96%
10/21/1987- 10.15%
10/20/1987- 5.88%
8/17/1982- 4.90%
5/27/1970- 5.08%

If those 10 days (out of 12,585 days) were "0" because you were sitting on the sideline, "your Dow" would have been 6,464. The cumulative effect of ONLY THOSE 10 DAYS accounted for nearly half the return on the Dow in the last 50 years.

Intuitively, the idea of timing makes sense...but for all practical purposes, it's almost impossible for ordinary people to do.

TO BE FAIR: If you also take out the worst 10 days as well, "your Dow" would be > 15,000! But, I usually hear about a bad market day when I get home...when I've already incurred the loss...then, it's too late...