Q: Is now the time for market timing?

A: No, staying invested means never missing a big up day.

There are many risks in investing. One of the biggest and least discussed is the opportunity cost of being out of the market on the days when the market surges ahead by 5, 7, or even 10%. Missing just the 30 best days between 1989 and 2008 would have reduced average annual return from 8.4% to just 0.6%. The remaining days — all 5,014 of them — accounted for the remaining 0.6% annual return.

Market timing — moving in and out of investments to enjoy the ups and avoid the downs — sounds appealing, but guessing wrong and missing even a few big up days creates a deficit that is difficult to recover without taking on even more risk.

Because we do not believe it is possible to systematically predict up and down moves in advance, we advocate holding for the long term a diversified portfolio of index investments that provide exposure to all potential market surges.

Next time: How can average be above average?

Contact: John Osbon 617.217.2772 josbon@osboncapital.com

Osbon Capital Management, LLC ("Osbon") is an SEC registered investment adviser with its principal place of business in the Commonwealth of Massachusetts. Osbon and its representatives are in compliance with the current notice filing requirements imposed upon registered investment advisers by those states in which Osbon maintains clients.

This Q&A contains general information that is not suitable for everyone and should not be construed as personalized investment advice.Ê The historical returns presented herein are based on market indices and are for informational purposes only and do not reflect actual client accounts.Ê The historical returns are not net of advisory and/or other fees and expenses.Ê Past performance is no guarantee of future results. There is no guarantee that the views and opinions expressed in this Q&A will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security.

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