Part 5/7:
Research shows that investors who exit the market during downturns often miss significant recovery opportunities. Analyzing past market performance reveals that historically, markets tend to rebound swiftly following substantial declines. For instance, after a 10% market drop, the average rebound over the subsequent year is nearly 11.9%.
Moreover, focusing on missing out on gains from the best trading days is critical: seven of the ten best trading days occur close to the worst days, making it extremely difficult to time the market accurately.