Ramit Sethi shows why timing the market destroys wealth. Missing just the 30 best trading days turns a $10,000 investment into $6,873 instead of $30,000. Over 80% of professional investors fail to beat the market consistently, so trying to outsmart it is futile.
Oh, I'm scared. I see red. Sell it all. Believing that you can buy and sell at the right time will actually cost you hundreds of thousands of dollars. Listen carefully, because this is actually one of the most costly mistakes that everybody— smart, not so smart, older, younger— everybody makes this. Timing the market, trying to outsmart the market is a classic mistake. You know, a study measured that if you had invested $10,000 and just left it alone for 15 years, you'd end up with around $30,000. But if you tried to time the market, meaning you tried to decide based on the news when to invest and when not, if you did that and you missed just the 30 best trading days, you would end up with only $6,873. You would have lost money. Do you understand what this means? It means that when you time the market, it's not just about randomly being right or wrong. We're talking about thousands, tens of thousands, even millions of dollars. Over 80% of professional investors— these are people who are highly educated, whose whose jobs it is to beat the market fail to do it over and over again. The idea that you can outsmart them when even they can't outsmart the market is preposterous. Some of you need to really take a big, fat, humble pill. I'm smart, and even I know that I can't beat the market.
