Unshakeable: Your Financial Freedom Playbook

by Anthony Robbins

But what if you get into the market at exactly the wrong time? What if you get unlucky, and you’re hit immediately by a correction or a crash? As you can see in the chart below, the Schwab Center for Financial Research studied the impact of timing on the returns of five hypothetical investors who had $2,000 in cash to invest once a year for 20 years, starting in 1993. The most successful of these five investors—let’s call her Ms. Perfect—invested her money on the best possible day each year: the day when the market hit its exact low point for that year. This mythical investor, who perfectly timed the market for 20 years running, ended up with $87,004. The investor with the worst timing—let’s call him Mr. Hapless—invested all of his money on the worst possible day each year: the day when the market hit its exact high point for that year. The result? He ended up with $72,487. What’s striking is that, even after this 20-year run of spectacularly bad luck, Mr. Hapless still made a substantial profit. The lesson? If you stay in the market long enough, compounding works its magic, and you end up with a healthy return—even if your timing was hopelessly unlucky. And you know what? The worst-performing investor wasn’t the unlucky one, but the one who stayed on the bench, the one in cash: he ended up with only $51,291.

I don't think I've ever seen this example, but it is a super powerful scenario to illustrate the power of consistency.