"It's time in the market, not timing the market." Watch this week's Arista Advice and find out how much short-term thinking can really cost you.
Hello, welcome to Arista Advice. Question of the week is: "Paul, what does the market look like in 2021?"
Well, I don't have a glass ball. We don't get into the prediction. We don't get into the forecasting, but we do look at some key factors and indicators to know the breadth and the depth and the positivity of the market.
Let me share with you this slide from BlackRock. BlackRock is one of the largest asset managers in the world. They are saying and they're helping us understand the big picture that by missing the top-performing days can hurt you long-term.
Hypothetically, if you had a $100,000 invested in the S&P 500 over last 20 years, if you'd stayed invested in the last 20 years your $100,000 has grown to $425,000. That's a large sum of money, but if you missed the top-performing date, it dropped all the way to $381,000.
If you got out of the market because of an election or because of a economic data or because a friend told you or a family member told you, and you missed the top five days, your $420,000 would be all the way down to $268,000, half potentially of the potential gain that could have been made by staying invested and turning off the TV and disconnecting from the over-connected social media and Internet sites that many people are over-connected to.
But don't miss out when the markets snap back. Did you know that 22 of the 25 worst days in the market were within one month of the 25 best days? So when there is a big day, a bad day will soon happen and when there's a bad day, a good day is to soon happen. So stay invested.
Think long-term in a short- term world, and remember go to AristaWealth.com to get other videos, tools, tips, and resources to help you optimize your life. Thank you.