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158 Don’t Make Me Say I Told You So

they have a long-term focus, but their actions belie that. If you
look at the probability of losing money in the stock market

over various periods of time, a longer-term focus dramatically
reduces the probability of losing money.

Short-Term Focus: Coping with Near-Term Fluctuations
Probability of losing money in the market 1994-2019

50%

46%
40%
Please replace this chart with chart #127 - RISK
35%
30%
OF STOCK MARKET LOSS OVER TIME - 2019.
30%
It's in our shared Dropbox folder.
20%
20%
10%

0%
Daily Monthly Quarterly Annually
Source: Morningstar, 2020

If investors saw that the probability of losing money on any

given day in the stock market was almost 50%, they would

probably be hesitant to invest in stocks or stock mutual funds.
If those same investors looked at this information and saw
that the chance of losing money in stocks over the next three

months was only 30%, they would probably be less hesitant to

invest. Investors who took a little longer-term view, seeing that
the chance of losing money in any one year from 1999-2019 was

Chapter 4: The Most Common Investor Mistakes