The short answer is no. Market timing can be an expensive habit. Fear and greed can lead investors to make emotional rather than logical decisions.
But what a year for investment returns. US Equities capped one of their best years of the past decade, with the S&P 500 advancing 29 percent in 2019, for a record $5.9 trillion in value added. And although we are in a compressed low rate environment, the US bond market, as measured by the Bloomberg Barclays index, returned 15 percent.
Sure, it is tempting not to take some gains off the table with the geopolitical landscapes in the Middle East and Asia, our political landscape in the US—as well as the long-running rallies we have had in financial markets.
Source: J.P. Morgan Asset Management analysis using data from Morningstar Direct. Returns are based … [+]
2018 J.P. Morgan Guide to Retirement
However, as a discouragement to market timing, look at the recent stats above from Michael Cembalest, CIO for JPM’s Private Bank. His stats support staying invested, as even missing a few good days can radically undermine portfolio returns. In his slide above, he looks at performance of the S&P 500 between January 1, 1999 and December 31, 2018. As you can see, a fully invested portfolio would have returned 5.62 percent on an average annual basis. But even missing just the twenty best days during the twenty year period would have produced a negative average annual return of -0.33 percent for the portfolio.