Yes folks, that is how much the S&P 500 index has climbed (from March 9, 2009, to February 15, 2011) since the bottom of the 2007-2009 recession. The S&P 500 index bottomed at 676, and today it closed at 1,328. What does that mean to you?
If you stuck with your broad-based equities investment through the horrible trough of the recession, you would have enjoyed seeing your investment make this awesome climb right back up. (Note: we are still down 15% from the peak of the market on October 9, 2007, where the S&P 500 index closed at 1,565.)
If you sold out near (or at) the bottom—and went to cash or CDs, and you had not reinvested your money, you’d be kicking yourself with all the other naysayers who predicted a double dip recession and tried their hand at “timing the market.” I had many conversations with family, friends, and clients who told me “it was the end” of the equities market. My crystal ball doesn’t exactly work like it should, but all we have is the past to learn from. And as my clients know from my 30-second “stock market history,” the market goes up and down, but it’s historical trend has been up…at least for the last couple hundred years!
Timing the market might work once or twice. And just by using statistics, at least one of the millions of investors (who tried to outsmart the market) is selling a book and showing that they predicted the direction of the market and timed it perfectly every day for the past 4-years. Is it repeatable? Sure. But you’ve only got the same “one-in-a-million” chance!!