Long term investing in stock market sensitive to timing.

[Peter Mateja]

Conventional wisdom states that holding stocks long enough (e.g. 20+ years) should give you a nice, somewhat predictable average rate of return, based on long term observations of market appreciation.  The caveat, of course, is that average returns can be devastated if you sell at the wrong time (e.g. in a downturn).  However, this fascinating graphic explores how average returns over 20 years can be just as sensitive to entry conditions.  It demonstrates that if you enter the market at the wrong time, even 20 years of holding, and selling in an upswing, can still deliver paltry returns.

The mantra I keep hearing in the REI world is that you make you money on the purchase, rather than the sale (simplistic, but it's a neat saying). I think this article makes a strong statement for the same in the markets.

http://www.nytimes.com/interactive/2011/01/02/busi...