Vanguard has an interactive tool on their website that allows visitors to compare the results when attempting to time the market based on certain investment rules. For example, if you exit the market after a 10% decline and re-enter the market after it appreciates by 5%, how would your results compare to simply owning the market (S&P 500 index) for the entire period? The tool can provide outcomes that span over the last 22 years.
I sampled this tool for quite a while, attempting to effectively “time” the market. I have to admit that I was very surprised by the results. Here is the link to the tool if you would like to give it a try for yourself – The truth about emotion.