We know it is a great temptation for investors to try to time the market. We are sure that some individuals are disciplined and nimble enough to successfully time when to get in and out of stocks. However, we believe market timing is very difficult and encourage our clients to be investors rather than traders. The equity markets have a particular habit of moving in bursts, which makes it difficult for timers to ensure that they participate in market ups, and avoid the downs.

Recently, we came across a very startling and interesting piece of data we would like to share with you. If you had invested $1 on January 1, 1962, the S&P 500 but missed the markets' ten best months, that $1 would be worth $6.99 as of September 31, 1994. However, if you had stayed fully invested the whole time, your $1 investment would now be worth $22.21.

Source: Hotchkiss & Wiley