They say the most important things in life are free. Sometimes, they’re also the most obvious and straightforward.

Lost in our quest to “tactically” trade stocks is the simple reality that market timing is very often a fool’s errand. That’s certainly not to suggest it isn’t possible to trade profitability. Clearly it is. And for some investor cohorts, being nimble and opportunistic is part of the job description.

But, as I’m compelled to remind readers from time to time, everyday people will lose more often than they’ll win trying to actively trade stocks. And by “everyday people” I don’t just mean the much-maligned Reddit crowd or sundry retail “YOLO”ers. I mean active fund managers, family offices and hedge funds too.

In the normal course of business, I’m every bit as immersed in the daily ebb and flow of markets and macro as the most obsessive traders and money managers, but I do try to step back from it on a regular basis to remind myself that at the end of the day, there’s an argument to be made that we’re all engaged in a pitiably foolish, needlessly stressful exercise in abject futility.

Have a look at the figure on the left below from BofA’s Savita Subramanian. Missing the best 10 sessions every decade would’ve been absolutely catastrophic, and somehow, that most hyperbolic of descriptions still feels like an understatement in this context. Subramanian noted that “since the 1930s, an investor [who] sat out the 10 best days per decade” would’ve had returns of just 40%, compared to ~19,844% for an investor who stayed in the market.

We all pretend to know the figures. Perhaps we can’t recall the actual math, but we all claim to understand the gist of it: If you plan to live a long time, and you intend to invest in equities for a meaningful portion of your life, you’re something worse than a fool to engage in market timing.

But how many of us everywhere and always resist the siren song of tactical trading? Not everyone, even as the vast majority understand it’s perilous, and potentially ruinous.

Sure, your returns would’ve been nearly 4,300,000% had you somehow managed to dodge the 10 worst sessions per decade over a century, but that’s impossible. And not just because most people don’t live to be 120, which is how long you’d need to survive in order to have an adult investing career that spans 100 years.

The figure on the right shows that, in Subramanian’s words, “time heals most wounds.” If you give it four years, you’ll recover losses suffered in a bear market, and sometimes, you’ll get it all back a lot quicker than that — it took the S&P just five months to recoup the pandemic crash.

Subramanian, in the course of calling an end to the 2022/2023 bear market, delivered another poignant reminder for investors tempted to engage in market timing. From the 1940s forward, there was just one decade during which total returns for the S&P 500 were negative: The 2000s. But the -9% return during that stretch was sandwiched between a 431% total return in the 90s and the 256% return investors enjoyed in the 2010s.