re: So with markets down this much in two days

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Just wait until you see all the money you have socked away get cut in half and everyone around you is losing their jobs. And the words complete financial meltdown are bandied about. Oh and that home you just bought with a 10% down payment, is worth less than you owe on it.

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I’m sure there are different versions, but this is a parable-like story about a cautious and responsible yet unlucky guy who made 4 investments at the worst possible time. It is a good reminder for the long-term investor when he’s getting nervous:

What if You Only Invested at Market Peaks?

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Luckily, while Bob couldn’t time his buys, he never sold out of the market even once. He didn’t sell after the bear market of 1973-74 or the Black Monday in 1987 or the technology bust in 2000 or the financial crisis of 2007-09.

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Even though he only bought at the very top of the market, Bob still ended up a millionaire with $1.1 million.

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I didn’t backtest the math, but I pretty confident it’s correct. Regardless, it shows value of the “time in market” over “timing the market” perspective, although one can benefit from both, since you can try to put it in as soon as you can when you can, but that’s not always possible. So then you dollar cost average as well when that’s more reasonable, especially when it’s more beneficial during volatile periods.

And unfortunately it’s still too easy to be our own worst enemy.