Individuals who leave their investments to weather the financial ups and downs receive better returns than those who try to time the markets.
According to analysis of the FTSE 100 by investment platform Sippdeal, investments left in the market for the ten years to March 2013 would have provided a return of 6.1 percent per annum, while missing even just the best 10 days over the decade could have resulted in a far less profitable outcome.
The results prove just how difficult it is to time the markets successfully, given that the FTSE can often gain more than two percent in just one day. Missing a turning point or a day when such significant rises occur is both inevitable and costly in terms of the returns received.
Consequently, a drip-feed approach, where regular investments are made over a period of time is likely to prove a far better strategy, with the effect of smoothing out the peaks and troughs of the markets.