Can you time the market?

Everyone believes they could have seen it coming. Get out before the crash, buy back near the bottom, ride the recovery. The record says otherwise: since 1871, more than half of the market's best months arrived while it was still down 10% or more, and waiting to buy the dip beat steady monthly investing in just 6.6% of 30-year stretches. Think you would be the exception? Try it yourself.

• 51.6%of a typical 30-year stretch's ten best months hit while the market was down at least 10%
• 6.6%of 30-year stretches since 1871 rewarded waiting to buy the dip over steady investing
• 42.4%median final wealth lost by missing just the ten best months of a 30-year stretch

Data: Robert J. Shiller monthly real total-return series (CPI-adjusted, dividends included), used with attribution. Shiller monthly prices are averages of daily closes, so months are slightly smoothed. All figures are in real (inflation adjusted) dollars. Cashing out is modeled in a taxable account: a flat 15% tax applies to realized gains above what you put in. We tax real (inflation adjusted) gains, which is gentler than reality, where nominal gains are taxed, so the figure here is conservative in your favor. The ghost strategies never sell, so they never owe this tax, that deferral is the buy-and-hold edge the game is about. This is a toy, not a backtest of any real product. Read the full 150-year analysis in our guide.

Educational only - not financial advice, not an offer, and not a recommendation. We are not a registered investment adviser. Full disclaimer.