Since 1926, the U.S. equity market has experienced positive returns:
- 56% of the time on a daily basis
- 63% of the time on a monthly basis
- 75% of the time on a yearly basis
- 88% of the time on a 5 year basis
- 95% of the time on a 10 year basis
- 100% of the time on a 20 year basis
Can we guarantee this in the future? Of course not! There are no guarantees when it comes to investing.
But betting on a crash, sounds intelligent until you realise (a) how difficult it is to predict the timing of a bear market and (b) how often the market typically goes up over time.
The market has “crashed” in the past and it will “crash” in the future. It’s just that no one, no matter how smart, can predict when it will happen.
In all strategies it makes sense to prepare for downside risk but it’s impossible to predict ahead of time. It’s most important to prepare for upside because most of the time it goes up. The opportunity cost of missed gains from waiting are often never recovered and inflation now makes this even more costly. If you have questions in relation to your strategy, please call.