• Clustering: Perhaps the biggest challenge is that the best and worst days tend to come close in time. The reason for this is that big selloffs or huge rallies lead to wildly overbought or oversold conditions. The rubber band gets stretched too far and has to snap back.Given the relative proximity these big days have on the historical timeline (see below), and how often these occur back to back, there is little room for error. Getting most but not all of the timing right could lead to missing the big recovery or getting caught in a damaging selloff. That has the potential to seriously impact returns.
25 Best and Worst Days Tend to Cluster Together
The Fickle Fortunes Of Market Timing
September 8, 2017
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