Timing is everything.
Arcangelo won the 155th running of the Belmont Stakes with a winning time of two minutes and 29 seconds. If he raced Secretariat in the 1973 Belmont, he would’ve lost by 5 seconds, a wide margin.
Carl Lewis set the world record for the 100-meter dash in 1991 with a time of 9.86 seconds. In 2009, Usain Bolt lowered it to 9.58 seconds, .28 seconds faster than Lewis.
Jules Verne wrote Around the World in Eighty Days in 1873. An 80-day trip in 1873 was a record. Today, the Space Shuttle can orbit the Earth in 90 minutes.
If you purchased the Vanguard 500 Index fund on March 9, 2009, the market low, you generated an average annual return of 15.86%, turning $10,000 into $85,150. If you bought the same fund on October 1, 2007, the market top, your return fell to 8.81% per year, and $10,000 is now worth $38,570. You more than tripled your money by investing at the top, but it’s not as impressive as if you caught the low.
You won’t invest at the top or bottom of a market cycle. A more realistic scenario is that you’ll invest between the two. For example, if you invested $10,000 in January 1990, you made 9.96% annually, now worth $246,260. Since 1990, four recessions and five major stock market corrections have occurred, including the Tech Wreck, the Great Recession, the 2018 pullback, the COVID correction, and last year’s decline. In addition, the Federal Reserve raised interest rates to the highest level in more than two decades.
Time is more important than timing.
Time is on my side; yes, it is. ~ The Rolling Stones
September 22, 2023
Bill Parrott, CFP®, is the President and CEO of Parrott Wealth Management in Austin, Texas. Parrott Wealth Management is a fee-only, fiduciary, registered investment advisor firm. Our goal is to remove complexity, confusion, and worry from the investment and financial planning process so our clients can pursue a life of purpose. Our firm does not have an asset or fee minimum, and we work with anybody who needs financial help regardless of age, income, or asset level.
Note: Investments are not guaranteed and do involve risk. Your returns may differ from those posted in this blog. PWM is not a tax advisor, nor do we give tax advice. Please consult your tax advisor for items that are specific to your situation. Options involve risk and aren’t suitable for every investor. Prices and yields are for today only and are subject to change without notice. Past performance is not a guarantee of future performance.
 Source: YCHARTS January 1, 1990 to September 22, 2023.