In or Out?

May 1999
Journal of Financial Planning;May99, Vol. 12 Issue 5, p21
Academic Journal
This article discusses the outcome of the investing strategies used by investors based on a study by CDA/Weisenberger. Is it better to know where to be in or when to get out? That's the fundamental investing question explored recently by the mutual fund tracking service, CDA/Wiesenberger. It looked at three investors: one who invested $1,000 in the S&P 500 in 1983 and stuck with it through 1998, one who perfectly timed buys and sells of the S&P 500, and one who picked the winning sector fund 15 years straight. The results? The buy-and-hold investor's $1,000 grew to $11,817 during those 15 years. The perfect market timer garnered $73,000 based on 44 successful timings. The hot sector picker, however, took home top honors with over $115,000. All of which, of course, is a wonderfully meaningless exercise since perfect timing and perfect sector picking are impossible. But at least if you're going to try, it's apparently better to pick the right place rather than the right time.


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