{"id":29469,"date":"2025-01-15T20:17:16","date_gmt":"2025-01-15T20:17:16","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/investing\/time-in-the-market-beats-timing-the-market\/"},"modified":"2025-01-15T20:17:16","modified_gmt":"2025-01-15T20:17:16","slug":"time-in-the-market-beats-timing-the-market","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=29469","title":{"rendered":"Time in the Market Beats Timing the Market"},"content":{"rendered":"


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Time in the Market Beats Timing the\u00a0Market<\/h2>\n

\n \t\tJanuary 2, 2025 at 6:18 pm<\/a><\/em>\n\t\t \t\t \t\t<\/p>\n

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It was another great year in the stock market. But predicting the timing of a bear or bull market is more challenging. Fortunately for investors, the stock market is up a lot more of the time than it is down. More specifically, over the last century, the stock market has been up 73% of the time for one-year periods and 94% of the time for 10-year periods (see graphic below and\u00a0Time is What Matters<\/mark><\/a>). That\u2019s why investors\u2019 time in the market beats the fools\u2019 errand strategy of trying to time the market. The long-term, consistent upward trend in stock prices makes investing in the stock market akin to sailing around the world with a persistent tailwind for the whole trip.<\/p>\n

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Source:<\/strong>\u00a0Capital Group and S&P 500 Index<\/em><\/p>\n

Many people believe investing in the stock market is gambling, but 73% and 94% odds for stock market gains seem a lot better than the probabilities of making money in Las Vegas. I explored this concept further in one of my recent articles (see\u00a0Elections Status Quo<\/mark><\/a>). Even with those favorable, lopsided odds, recessions do occur, albeit infrequently. As you can see from the\u00a0chart below<\/mark><\/a>, since World War II, we have experienced a dozen recessions averaging 10 months in duration. And guess what? Successful post-recession recoveries have equaled 100% (12 for 12). Despite the short-lived bear markets, stock prices have appreciated more than 30x-fold since the end of World War II.<\/p>\n

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Source:<\/strong>\u00a0Yardeni.com<\/em><\/p>\n

2024 Predictions<\/strong><\/p>\n

There were plenty of pundits and talking heads who falsely predicted a recession in 2024, but the odds certainly worked in investors\u2019 favor. For 2024, the S&P 500 index gained +23%, and this comes on the heels of a banner 2023, which was up +24%. Experiencing back-to-back +20%-years is a rare occurrence, which hasn\u2019t occurred since the late-1990s. As we look into 2025, achieving three consecutive positive years in the stock market is not unprecedented, but as I mentioned earlier, predicting the timing of a down market can be tricky.<\/p>\n

Case in point, predicting the outcome of stock returns, even with perfect information can be very daunting. What would have been your prediction of the 2024 stock market return, if I told you the following events were to occur this year (in no particular order)?<\/p>\n