Is the timing of the market already work? Charles Shawab Yazan

Theoretical, timing stock market To increase your profits to the maximum extent looks great. If everything goes according to the plan, you will buy shares in time and price, then sell them in time and price to ensure the highest return.

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The problem is that things are rarely going according to the plan – even for sins investors. For this reason, many investment companies and consultants warn against market time attempt. One of these companies is Charles Schwab, who recently addressed the topic with Analysis from the Shwab Center for Financial Research.

Is the timing of the market really work? Reading to find out what Charles Schwab I should have said about it.

In its report, Shawab presented an example of a reward at the end of the year or Income tax recovery Weighing if you are going to invest money now or wait until you think you will get a better return on your money.

This may happen if stock markets have recently reached their highest levels (as it was recently). Should you wait for the market to be blessed and the shares are cheaper for purchase?

The answer is perhaps “no” – at least according to Dawab. Her research found that the cost of waiting for the “ideal” moment of investment exceeds the interest, mainly due to Market timing Quite it is “almost impossible”.

Shawab’s recommendation was to avoid market timing and instead investment “as soon as possible.”

Payment: The owners of millions who make themselves suggest 5 shares that you should never sell

To clarify its results, Shawab put five basic Investment scenarios And possible results. In each case, the investor received $ 2000 at the beginning of each year for 20 years ending in 2024 and leaving money in the stock market, represented by the S&P 500 index.

This is a quick look:

1. Peter was aimed at investing $ 2000 at the lowest closing point in the market every year, which mainly means market timing perfectly.

2. Ashley pursued a simple approach in which she invested $ 2000 on the first day of trading every year.

3. Matthew adopted a medium -cost strategy in dollars. This included the division of its annual allocation of $ 2000 to 12 equal parts, which he invested at the beginning of each month.

4. “Rosie” was a bad luck to invest $ 2000 every year at the height of the market.

5. “Larry” chose to leave his money in cash investments instead of putting it in the stock markets.

How did every investor do? This is what Shawab found: