I have listened to Index Fund Adviser’s podcast for years and offer excellent financial information on their website too. I wanted to show you their latest video podcast. Wow! It’s great for beginning and seasoned investors.

Consider this, if your grandfather invested $1000 for 70 years from 1942 and ending in 2011 with three different strategies, your grandfather would have:

1. One-month Treasury-about $17,000

2. Large-cap: $1.6 million

3. Small-cap: $12 Million

4. Market timing: Every year choosing ahead of time the best performer of the above three asset classes: $6 BILLION!

Take a look at this excellent video by Index Funds Advisers, Inc. It has lots of pictures and graphs to illustrate how markets work over very long periods of time and that trying to predict the highs and lows ahead time will fail: Click here for PART 1. And PART 2: Click Here. Take a look at the entire website: Click Here.

My Comment: Even if every investor in the world knew the exact dates of the market highs and lows, timing would be impossible. You knew that such and such date the market will reach its peak and you want to sell. That’s great except that nobody will buy your stock if everybody knew that it was going to fall in the next day, week or month. Remember potential buyers also know what you know are trying to sell too. What happens when there are no buyers? The price falls, so you cannot capture those gains.

 

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