- I have always been a market timer. My intention was not to beat the market, it was to avoid the pain of the largest sell-offs. After FIRE, being a smart guy, it was easy to spend too much time strategizing about investments. Looking back, I would be so much further ahead if I had bought and held VTI. And ironically, the pain of down markets would have been far less than the cumulative stress of buying and selling over the years. For buy and hold investors, the pain of down markets is temporary. For market timers, locked in losses are permanent. Now I teach my kids, just buy and hold, apply your brain power to something more productive.
- Stress is cumulative. Market stress, family stress, budget stress, health stress all sum together to affect decision making. Under stress, tunnel vision may occur, making it harder to see the skillful path in the moment. An investment strategy which depends on the decision maker being at the top of his game (forever) is fragile and unlikely to succeed over the long run.
- Going forward, I intend to learn from others more than from making my own mistakes. Sometimes the skillful path is the easy path. See it, take it.
After slipping substantially in 2020, I am finally ready to commit to buy and hold for life. I am giving up market timing and accept that I have no idea if VTI will go up or down from here, in the short run. Locking in my losses at these prices is sickening, but waiting to get in would likely be more costly in both slippage and stress. Grateful for all the good in my life. I will take the Simple Path to investing forward from here.
Buy-and-hold, long-term investing results in impressive, persuasive arithmetic, but there is no assurance of its continuance.
CNBC
Why long-term investors should never sell stocks in a panic
PUBLISHED SUN, MAR 22 202011:15 AM EDTUPDATED MON, MAR 23 20208:01 AM EDT
Pippa Stevens
@PIPPASTEVENS13
KEY POINTS
While it might seem counterintuitive to sit back and relax while stocks post swift and steep losses, for investors with longer-term time frames it typically pays to wait it out.
Looking at data going back to 1930, Bank of America found that if an investor missed the S&P 500′s 10 best days in each decade, total returns would be just 91%, strikingly below the 14,962% return for investors who held steady throughout the ups and downs.[/list]