Is there a good time to buy or sell actively managed funds?

Why staying invested is the name of the game

Paul Kaplan 1 August, 2019 | 2:45AM Maciej Kowara

Runners

Over the long haul, the stock market's outperformance over cash boils down to just a few critical months. Miss those months and you will have missed all the risk premium to be earned from holding a volatile asset such as stocks.

Between January 1926 and October 2018, U.S. large-cap stocks owed their outperformance over cash to just 51 months—less than 5% of the months in the sample. If you held stocks for all 1,063 months apart from those 51 months, which we will call "critical months," a term which we will define more precisely below, you would not have beaten cash.

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About Author

Paul Kaplan  Paul Kaplan is Director of Research for Morningstar Canada.