IMPORTANT NOTE: As part of our ongoing efforts to make it easier for you to easily access all our content, we will be consolidating our web presence in the coming months. Gestaltu.com will be ported over to our new home for research and content at www.InvestReSolve.com/blog.
Please take this opportunity to update your feed readers with the location of our new blog at InvestReSolve.com/blog.
The buy-and-hold crowd, including many mutual fund companies and a large cross-section of vocal pundits, like to talk about how missing the N best days/months in the market causes a serious impairment to long-term investor returns.
We beg to differ:
What they fail to mention is that, because stock market volatility clusters during periods of market crisis, the best daily and monthly stock market returns are directly adjacent in time to the worst monthly returns. In fact, investors would be considerably better off missing both the best and worst days/months in the market. These investors would realize the same gains as buy-and-hold investors, but with much less grief in the form of volatility and drawdowns. Simple trend-following strategies work for precisely this reason…read more at InvestReSolve.com/blog.