This chart shows the cumulative return (not including dividends) of the Dow Jones Industrial Average over two different timeframes. The first time period is from the top of the 1929 bubble until March 10, 2009. The second time period is from the market bottom in 1932 until March 10, 2009. A dollar invested at the low compared to the top has returned about 10X as much. Market timing is not an easy thing to do well - in fact it is extremely difficult. The purpose of this chart is not to advocate market timing, but to provide perspective on how timing can make a hugh difference in market returns. It also shows why Warren Buffet says, “be fearful when others are greedy, and greedy when others are fearful.”
Data source:
> Dow Jones Indexes
===============================================================================