What If You Only Invested at Market Peaks?
Video Overview & Insights
This is the story of Bob, the world's worst market timer. Follow along on Bob's journey as an investor who had the misfortune of only investing his savings at the peak of the stock market just before a crash. The results may surprise you.
1. Buy index not stock pick
2. Never sell
3. Have a long healthy life at least 40+ years investing
Check out Ben's post that inspired this animation: https://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/
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whats bob cagr?
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You would have to believe that you can’t lose in the stock market. Does anybody really believe that?
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And then there was an investor named Warren, who preached the same message,
who claimed to hold forever, but unlike Bob, unloaded stocks when they went higher,
and primarily bought more stocks, when the prices were lower. Warren also, can make
$2 .5 million over 40+ years -- EVERY WEEK or so.
This story demonstrates the power of the market, but it is an incomplete picture without
exercising judgment. So listen to ALL the stories. Warren did.
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Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here:
So the question is, what do you do in retirement when you have to start taking it out? Based on Bob's bad luck, there will be a 50% drop the day after retirement and now he has $550 k that he needs to take $50k from for that year.
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#investing #stockmarket #retirement
FYI this only really works with well established stocks, index funds, derivative investments, etc.
If you try to do this strategy on individual stocks such as company start ups, there absolutely is the real possibility of losing all your money.
So if you want to be like Bob… there are valuable lessons to be learned from.
More User Perspectives
What were the assumed salary and savings rate to generate those contribution amounts? Sorry if I missed it.
@danking4232Ben’s research on 'Bob' is the ultimate fix to market anxiety. It’s a perfect reminder that the US market is so resilient that even the worst timer in history wins if they have the patience to stay in. This story should be mandatory reading for every 401k holder in 2026.
@TheWealthArchiveUSThis is a great video, because it all comes to a few core principles. Dont time the-market, just dollar cost average no matter what, and stay invested. You dont lose money until you sell the position. If you do it in your 401k’s then you must do it in your personal life.
@longterminvestmentsonly4817I get the premise, but Bob actually got very lucky by:
A) Buying S&P500, picking the best index of that period. There are many more index's and many of them would have meant Bob would have been wrecked.
B) Buying this "best" index during one of the greatest extended periods of market growth EVER seen. The crashes were almost inconsequential, and not worth focusing on, tiny bumps in the road in this roaring period of growth.
There's NOTHING to suggest this can be replicated going into the future.
But of course, time will tell.
That is called a statistical analysis with only one degree of freedom. It is ONLY talking about the US stock market. Now do the same analysis with Nikkei or CSI or even SX5E and let's see if that conclusion still holds.
@kavehtehraniI wonder what Bob would have got if he had invested at the corresponding troughs in the market?
@gaza2322Brilliant video.Just keep buying & never sell.
@rameshshroff8970Terrible concept. Selling at a gain is a gain. It's not really a gain until you sell it
@colsonskur6714I am Bob.
@1970SSThis video was made for you by institutional investors who want to shake you down for all your money. SOURCE: I used to be one of them and know all their tricks.
@omegacon4Be like Bob… diamond hands
@palamentor7008Now make this video about Japan
@DoshindeReusThis is a mind blowing video. It just shows you how holding on is the most important thing you can do. Ignoring timing helps also.
@robertross8565밥 개쩌네 경제위기 4번 40년동안 직장 안짤리고 , 인생에 아무런 굴곡없이 은퇴때 까지 고액연봉자로 일하고 존버 가능
@맛춘뻡Amazing video, loved it. It will help my children very much.
@F9ismeGreat. now he is old and limpy,probably have few interest left, and have to use that 1 million somehow within his next decade or so, since that is the average life span. Then he will never come back to this universe again, or ever get to use any of it again. he basically traded 30 years of his life for, what, 1 million dollars?... ok.
@SanctinOr you can buy treasury bonds and wait for grat opportunitiea rather than chasing rhe trend like Buffett does
@KilgoreTroutAsfIf I had $360k, I would allocate $100k to tech stocks and $260k to dividend stocks with a proven track record—focusing on capital appreciation and year-over-year dividend growth.
@Daaannn-g6kBob started investing at the onset of a secular bull market.
If Bob started investing in 1929, he would be down 63% in 1982.
How much was his principal put in in total that resulted in 1.1m?
@---tx9xxWhat was the average annual ROI over all these years?
@andrescordero7123Be a Bob!
@sellspacecoastIn hindsight you can always time the market
@smeshnoymatvey2054its April of 2024. Bob is about to get in the market again. I'm out.
@AAbdel-lf4xxBobs biggest mistake was not spreading his shares, to much at once = greed and a market flip. Silly bob.
@Fx_deletedWhat a great video!
@cuteviews16What's his compounded annual return?
@crazycool1128buy high, buy high
@mo-akifEveryone in corporate America should watch this. It should be a pre-requisite for a 401k plan.
@hbdejean3006Meanwhile the Japanese stock market has not returned or beat its high after 40 years.
The Japanese Bob would have been destroyed
Such an important video!
@jwealthmgmt👍
@george6977What's the point of living like this. Even though he held on and made money in the end what's the point. He ended up with 1.1 million but he was always sacrificing. How did he spend the money or he died?
@Maestro.PapritosThe key for this to work is that 1. He never sold, 2. He Bought Vanguard S&P 500 funds
@SuroyI did the math. This is not true. Bob would only end up with $577K after invested $128K. Let me explain.
I can't get VOO historical past 2010 (so I am not sure which Vanguard S&P Index fund are you using), so I am using S&P chart as provided by Yahoo Finance.
1980 peak S&P: $142. Bob purchased $8000 worth of shares. So he bought 56.34 shares
1987 peak S&P: $336. Bob purchased $16000 worth of shares. So he bought 47.62 shares.
2000 peak S&P: $1552. Bob purchased $54000 worth of shares. So he bought 34.79 shares.
2007 peak S&P: $1561. Bob purchased $50000 worth of shares. So he bought 32.03 shares.
His final total shares: 56.34+47.62+34.79+32.03 = 170.78 shares
S&P at peak of 2019 before covid crash: $3380
170.78 x $3380 = $577K
It's still not a bad number, but Bob did not end up becoming a millionaire by 2019
You missed losses due to corporate bankruptcy's which were completely lost.....for example how many shares of Lehman did he own, etc
@agaragar21That is a MIRACLE of Bad timing.....PRETTY unlikely !
@agaragar21One critique: Bob invested at the peaks of a remarkable what many people call 1980 to 2021 bull run...
Had Bob invested at other time periods, I'm not so sure..
i am Bob now 😀
@G-mac2024Bob is simply the best diamond hands i ever known. His mentality is amazing
@tranthanhbao9978I am Bob
@bigheadrhinoAmazing video!
@ahmedam77How can you not be confident in future of stock market after this?
@DandyFinanceA great video to watch during downturns & meltdowns. Yes, this generally applies but there are exceptions. How about a Japanese investor who put everything into the Japan stock market in 1989 just when they were about to enter retirement (with no more regular income to invest later)? That would be a nightmare scenario.
@wuchinshan133