“We help you get out of the market before it goes down too much and get you back in to get most of the recovery.”
I heard those words from a respectable, well meaning, deluded investment firm. Who wouldn’t want to get in on this? Avoiding most losses while getting most gains! Eventually you’d own the world! But…if there’s nobody who owns the world…maybe this doesn’t work.
In honor of Jack Bogle Day, let’s see what his company discovered:
If you wanted to lose money in the stock market, how would you do it?
This is a challenge, as the S&P returned 5.3% per year over the past 15 years (yes, even counting the dreaded 2008).
While it seems nearly impossible to lose money, a lot of work has been put into giving you ways to reliably lose money (although I’d plead with you not to use any of them).
Hmmmm… Let’s look at actual history for a guide:
As you might expect, there are many ways to invest poorly. Many people tell you to find a professional stock fund manager to get the best returns.