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401k holders – made out worse

SmartStops comment:   Its disappointing to see that Fidelity puts out these kinds of stories, because god forbid,  people would actually  sidestep periods of great risk in markets.  Sure – if you pick the time period from Oct.2008-March 31,2009, you’ll show a bad record vs. buy & hold. But  why does the mutual fund industry insist on hiding the other part of that data that has been published – about how missing the worst days of the market can increase your returns by an amazing amount?    And it means you don’t even have to be that good at timing when to get back in.    Fidelity – have you seen these studies?     In Defense of Market Timing 

   We wish SmartStops could have been ready by Oct. 2007 for the public to use, given that’s when our risk alerts started and you could have been out of the market well before the Oct. 2008 drop. In fact, you could have been bottom fishing all you wanted during 2008 (keeping your losses to a minimum with smartstops)  to earn a much better return than the 2% Fidelity says people who held  from Oct. 08-March ’09  earned.     Yes, buy & hold can show the better performance numbers overall for any given time slice period,  but what was the opportunity cost to you?    If you could have been out of the market 50% of the time earning money with that investment vs. losing money, why would you think buy&hold was the better way to go?    Think about that opportunity cost when you are looking at our performance comparison tool.    

401(k) holders who bailed on stocks in 2008 made out worse: Fidelity

Remember that this is standard rhetoric  from the mutual fund industry. They want your money just sitting there.

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