Yes, another installment of don't time the market 101. Seems repetetive, but I just keep fielding questions on this topic, and I also keep seeing examples where a little advice would have gone a long way. So....I'm going to tell you a little story.
During the lost decade for investors in the US the major averages were terrible, with the SP500 losing 9.1%. During this time, there was shining bright light for investors in the form of Ken Heebner, and his CGM focus fund. Over this same period, the fund did approximately 18% return annually!!!
It's too bad that investors in the fund didn't get to enjoy the same success........???
Because of investor fear and short termism, the average investor in the CGM fund over this same period experience a loss of almost 11%!! But how you ask?
The fund accomplished its overall performance in very short bursts, complemented by long periods of sideways or down moves. While ultimately it didn't matter to the long term investor, those who were dodging in and out of the fund based on what I said earlier.....got creamed.
If this is not the single best case for staying true to your investment objectives, I don't know what is.