What it shows is that those who held their investment for 300 consecutive days at any time in the 545 days would on average have made a return of 161.95%. Even when buying and exiting their investments at the very two worst points in time they would still have enjoyed a return of 6.21%. At the very best two days, they would have enjoyed returns of 660.49%.
On the other hand, those who stayed for 30 days would on average have made a return of 16.31%, but if they bought and exited at the very worst point they would have seen losses of -58.48%!
Over 2 days, the average gain is 1.04%, but it goes from minimum -44.03% to max 30.25%.
Someone who would have bought on day 1 (26 September 2019) and stayed in the Autopilot the whole time to 23 March 2021 would have seen 932% returns.
Using the Autopilot for 2 days is a gamble
The Autopilot isn’t doing anything with a 2-day timeframe in mind. So if you do, you are using it to gamble (and we don’t get why you would, because there are much cheaper alternatives).
Since 26 Sept 2019, when the Autopilot started in production, the returns for holding a balance any 2 consecutive days see returns of minimum -44.03% to max 30.25%, with the first quartile being -2.03% and the third 4.07%. It feels a bit like a coin toss.
The first quartile becomes positive (3.96%) at a minimum of 120 days of holdings. But if you entered and exited at the very worst time over 120 days in the past 545 days, you could still have seen negative returns of -41.94% (the minimum).
It’s only if you held for 300 days that you were guaranteed to see positive returns. We can’t promise it will repeat, as there are never any sure things in the markets, but it will give you an idea of what time in the Autopilot does to risk, much like we showed you what time does to the risk of holding stocks.
Should I get in and out often to try and beat the odds?
Far from us to tell you what you should do.
What we know is that in the traditional markets, according to a study by JPMorgan Asset Management, for the period 1998– 2017, the average active investor had an annualised total return (CAGR) of only 2.6%, whereas buying and holding the S&P500 index for the same period resulted in a CAGR of 7.2%. This significant underperformance is caused by bad market timing and panic selling, as visualised below. Excluding the ten best days for the S&P500 in terms of returns over the whole period results in a CAGR of ‘only’ 3.5%. Since recoveries from stock market declines often provide huge gains, the best days in terms of return often come straight after such a market decline. However, many investors panic during these severe market declines and sell some of their positions. Consequently, they are likely to miss out on huge potential gains during the recovery, meaning that the cost of this panic-selling tendency is significant.