The Secret to

Picking the Right

Time to Invest
www.ZacksPCG.com | 1-800-701-9830

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 If you are contemplating whether to invest in the markets now or whether to wait for a more ‘opportune’ entry
point, you’ll want to read this guide first. Our data-driven insights should help with your decision.

When investing for the long-term, we believe the costliest decision an investor can make is being out of the
market. It’s time in the market -- not timing the market -- that creates long-term wealth.

As legendary investor Peter Lynch put it:

“Far more money has been lost by investors preparing for corrections, or trying to
anticipate corrections than has been lost in corrections themselves.”
Throughout history, the stock market has risen to new heights even with short-term setbacks and bear markets
along the way. Generations of investors have benefited from this long-term wealth creation.

The problem for many investors—even savvy, experienced investors—is that when investing, emotions can
play a big role, overcoming what should be an objective, discplined process. In our view, an unemotional, well
thought out investing plan is the best way to maximize your long-term investment opportunities to generate
exponential, compounded growth provided by the equity markets.

Trying to time and “outsmart” the markets has rarely works. With decades of investing experience on behalf
thousands of clients, we believe the longer an investor has exposure to the equity markets, the better the
chance of achieving his or her long-term financial goals. In our view, investing now is better than waiting.

So, why are we so convinced investing now is the best course of action?

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 1. Trying to Time the Markets Can Cost You
Very few investors, even the so-called experts, have the ability to call the market “top” or “bottom” on a
consistent basis. Attempting to out-smart the market can be dangerous and lead to poor returns. If your timing
is off by even the smallest of margins, the consequences to your retirement over the long-term could
be devastating.

History reminds us that the worst days in the market are often followed immediately by some of the best days
in the market. Many investors can find themselves whipsawed, first selling and taking a severe loss after a
significant correction, then investing again in the markets when it’s too late — missing the larger than normal
gains generated from the “off-the-bottom” cycle of recovery.

Data shows that attempting to time the markets can be hazardous to long-term financial health. From 2001
to 2020, the S&P 500 delivered a 7.47% annualized return. But if an investor missed just the 10 best days,
annualized return was cut by more than half to 3.35%. Missing the 30 best days meant losing money over the
20-year period.

Returns of the S&P 500

Performance of a $10,000 investment between January 2, 2001 and December 31, 2020

7.47%
Seven of the best 10 days occurred
$42,231 within two weeks of the 10 worst days.
» Six of the seven best days occurred after
the worst days

» The second worst day of 2020 – March

12 – was immediately followed by the
second best day of the year

3.35%

$19,347
0.69%

$11,474 -1.49%
-3.44%
$7,400 -5.21% -6.81%
$4,969
$3,430 $2,441
Fully Missed 10 Missed 20 Missed 30 Missed 40 Missed 50 Missed 60
Invested Best Days Best Days Best Days Best Days Best Days Best Days

https://am.jpmorgan.com/us/en/asset-management/adv/insights/retirement-insights/guide-to-retirement/

Zacks Investment Management www.zackspcg.com 3

 2. Timing the Market Perfectly Isn’t Necessary
No one, not even the big investment houses, can predict market highs and lows 100% accurately. Timing the
market perfectly is not needed to achieve strong long-term results.

Charles Schwab ran a study where they tested the investment of $2,000 a year for 20 years starting in 2001. The
study used five hypothetical investors:

» Investor #1 had impeccable, perfect market timing (not actually possible)

» Investor #2 invested the money each year immediately.

» Investor #3 invested monthly using dollar-cost averaging.

» Investor #4 was a terrible market timer, always investing money at market peaks instead of bottoms.

» Investor #5 stayed in cash.

Here’s what happened:

» The Impeccable Perfect

$160,000 $151,391 Investor’s assets grew to:
$135,471 $134,856 $151,391
$121,171
» The investor who invested
$120,000 immediately accumulated
returns of: $135,471

$80,000 » The dollar cost averaging

investor accumulated
$44,438 returns of: $134,856
$40,000 » The investor with terrible
timing increased assets to:
$121,171

Perfect Timing Invest Dollar Cost Bad Timing Stay In Cash

» The investor who sat on
Immediately Averaging Investments
the sidelines in T-Bills had
returns of: $44,438

https://www.schwab.com/resource-center/insights/content/does-market-timing-work

Over 20 years, the impeccable perfect investor only generated an additional $5,354 in total returns as
compared to the investors who simply invested immediately.

* https://www.pbs.org/wgbh/pages/frontline/shows/betting/pros/lynch.html - Peter Lynch Interview, PBS Frontline

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 A High Probability of Positive Returns
Finally, a good reason to invest now is that investors will have a much higher chance of generating a long-term
positive return. From 1926 to March 2020, the S&P 500 has delivered a positive return in rolling 20-year periods
100% of the time. You read that correctly: no matter what 20-year period you look at -- whether it includes the
Great Depression or the Great Recession -- the S&P 500 delivered a positive annualized return.

It’s time in the market -- not timing the market.

Frequency of Positive Returns in the S&P 500 Index

Overlappping Periods (1926-2020)
From January 1926-December 2016 there
are 892 overlapping 20-year periods,
100% 1,012 overlapping 10-year periods,
100% 94.8%
1,072 overlapping 5-year periods, 1,096
83.9% 87.9%
overlapping 3-year periods, and 1,120
80% 74.4% overlapping 1-year periods. The first period
starts in January 1926, the second period
starts in February 1926, the third in March
60%
1926, and so on. In US dollars. The S&P data
are provided by Standard & Poor’s Index
40% Services Group. Indices are not available
for direct investment; therefore, their
20% performance does not reflect the expenses
associated with the management of an
actual portfolio. Past performance is not an
1-Year 3-Year 5-Year 10-Year 20-Year indication of future results.

*http://static.fmgsuite.com/media/documents/1cd859dc-c6fc-4c37-99bd-b0331fa44d2e.pdf

The Bottom Line

The real secret to successful investing isn’t a secret at all. If your time horizon is more
than ten years, you don’t need to outsmart the market. In our opinion, you simply
need to INVEST NOW — regardless of the market’s current level. Data suggests that
time in the market gives you the best.

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How Can Zacks Investment
Management Help?
Retirement Planning
To achieve your financial goals for retirement, we
believe it is essential to create a clearly-defined
strategy. Count on Zacks Investment Management
to help you develop a strategy that reflects your
individual needs, goals, and risk tolerance. Once
you have your strategy, we’ll help you stick to it.
Portfolio Management
Since 1992, Zacks Investment Management has
helped investors meet their financial goals, with
billions in assets currently under management.
Investing is managed by our Investment
Committee, with decades of industry experience.
We create customized portfolios for each client
using our proprietary strategies, many of which are
top-ranked by Morningstar.
Two ways to learn more and speak to one of our retirement professionals:
Call 1-800-701-9830 or click below to schedule an appointment
Schedule Your Advisor Consultation
Zacks Investment Management
Personalized Investment Counseling
When you’re a Zacks Investment Management
client, you can count on individual attention and
prompt, responsive service. We’re here to answer
your questions, work with you to identify and reach
your goals, and to make sure you’re comfortable
with the portfolio management you receive.
Investing is an emotional process, and we will work
with you to ensure disciplined investing, both in
bull and bear markets.
Your Wealth Management Advisor is always
available to meet your needs, including:
» Helping you understand what’s going on in
your portfolio—and why
» Reviewing your investment goals, objectives
and strategies on a regular basis
» Addressing any day-to-day needs you may
have in a prompt, responsive manner
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 © Zacks Investment Management
227 W. Monroe, Suite 4350, Chicago, IL 60606

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