Invest Regularly: Disciplined Investors Catch Unexpected Opportunities

There is no security on this earth; there is only opportunity.

— Douglas MacArthur, General

If you are a fisherman, you know there will be days when the fish aren’t biting, and other days when they take the bait the moment your line hits the water. But on good days or bad days, you will only catch fish if you are actually fishing.

This lesson is lost on many investors who try to pick and choose when to be invested and when not. They believe that if they can figure out the right times when to be the market (or out) they will make more money — and avoid steep declines.

Sounds good in theory. But the reality is that predicting the best and worst times to be invested is difficult.

Consider that the third-best one-day return in the last three decades occurred only two days after the worst one-day return (stock market crash of 1987). Most investors who bailed out of the markets in response to the crash would have missed a significant bounce back.

Over the last 20 years,iIf you’d invested $100,000 in the S&P 500 and missed the 10 best days, your portfolio would have grown to $200,030.2 However, if you’d stayed invested and ”kept fishing,” your portfolio would have grown to $400,135. Quite a catch!