Time, Not Timing, Is What Matters | American Funds

Client Conversations

TALKING POINTS
Time, Not Timing, Is What Matters

It’s time in the market, not timing the market, that matters most.
 


Generally, individual investors who “time” the market fall short

  • Although you may believe you can time the market, even the most experienced investors can’t know when or in what direction the markets will move.
  • A 2012 DALBAR study found that in the 20 calendar years ending in December 2011, the Standard & Poor's 500 Index delivered a 7.8% average annual rate of return. Over the same period, the average investor1 earned just 3.5%.
  • Moreover, you only have to miss a few of the best days, or hit a few of the worst, to jeopardize your ability to meet your long-term objectives.
  • CNN reports that if in 1996 you had invested $10,000 in the S&P 500 Index and left it there, by the end of 2011 you’d have just over $22,000. If, however, you missed only the 10 best trading days during that period, you’d have ended up with only half of that amount.
  • I can help you develop a diversified portfolio that is right for your personal level of investment risk and doesn’t require you to predict when the market will rise or fall.

This material is intended for use by financial professionals or in conjunction with the advice of a financial professional.

Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing. 

1

The “average investor,” according to the DALBAR Quantitative Analysis of Investor Behavior, is based on monthly industry mutual fund sales, redemptions and exchanges.

Content contained herein is not intended to serve as impartial investment or fiduciary advice. The content has been developed by Capital Group, which receives fees for managing, distributing and/or servicing its investments.

Past results are not predictive of results in future periods.