Motley Fool argues for staying invested through bear markets: J.P. Morgan found the seven best days in two decades came within two weeks of the 10 worst. Missing the S&P 500’s 10 best days over 20 years cut annualized returns nearly 40%, the article says.
The article says bear markets last an average of 15 months, while the dot-com downturn lasted 31 months. It cites that variation as a reason market bottoms are difficult to time.
The piece recommends long-term buying and holding, naming Vanguard S&P 500 ETF as an example of a fund spread across U.S. sectors. It reports a 10% historical annual return for the S&P 500 since 1957, while noting that return is not earned during bear markets; it also says Warren Buffett recommends an S&P 500 fund for most investors.
