The Risks and Rewards of Timing the Market
Timing the market seems simple enough: buy when prices are low and sell when they’re high.
But there is clear evidence that market timing is difficult. Often, investors will sell early, missing out on a stock market rally. It can also be unnerving to invest when the market is flashing red.
By contrast, staying invested through highs and lows has generated competitive returns, especially over longer periods.
The above graphic shows how trying to time the market can take a bite out of your portfolio value, using 20 years of data from JP Morgan.
The Pitfalls of Timing the Market
Mistiming the market even by just a few days can significantly affect an investor’s returns.
The following scenarios compare the total returns of a $10,000 investment in the S&P 500 between January 1, 2003 and December 30, 2022. Specifically, it highlights the impact of missing the best days in the market compared to sticking to a long-term investment plan.
|Portfolio Value||Annual Return (2003-2022)|
|Invested All Days||$64,844||+9.8%|
|Missed 10 Best Days||$29,708||+5.6%|
|Missed 20 Best Days||$17,826||+2.9%|
|Missed 30 Best Days||$11,701||+0.8%|
|Missed 40 Best Days||$8,048||-1.1%|
|Missed 50 Best Days||$5,746||-2.7%|
|Missed 60 Best Days||$4,205||-4.2%|
As we can see in the above table, the original investment grew over sixfold if an investor was fully invested for all days.
If an investor were to simply miss the 10 best days in the market, they would have shed over 50% of their end portfolio value. The investor would finish with a portfolio of only $29,708, compared to $64,844 if they had just stayed put.
Making matters worse, by missing 60 of the best days, they would have lost a striking 93% in value compared to what the portfolio would be worth if they had simply stayed invested.
Overall, an investor would have seen almost 10% in average annual returns using a buy-and-hold strategy. Average annual returns entered negative territory once they missed the 40 best days over the time frame.
The Best Days in the Market
Why is timing the market so hard? Often, the best days take place during bear markets.
|1||Oct 13, 2008||+12%|
|2||Oct 28, 2008||+11%|
|3||Mar 24, 2020||+9%|
|4||Mar 13, 2020||+9%|
|5||Mar 23, 2009||+7%|
|6||Apr 6, 2020||+7%|
|7||Nov 13, 2008||+7%|
|8||Nov 24, 2008||+7%|
|9||Mar 10, 2009||+6%|
|10||Nov 21, 2008||+6%|
Over the last 20 years, seven of the 10 best days happened when the market was in bear market territory.
Adding to this, many of the best days take place shortly after the worst days. In 2020, the second-best day fell right after the second-worst day that year. Similarly, in 2015, the best day of the year occurred two days after its worst day.
Interestingly, the worst days in the market typically occurred in bull markets.
Why Staying Invested Benefits Investors
As historical data shows, the best days happen during market turmoil and periods of heightened market volatility. In missing the best days in the market, an investor risks losing out on meaningful return appreciation over the long run.
Not only does timing the market take considerable skill, it involves temperament, and a consistent track record. If there were bullet-proof signals for timing the market, they would be used by everyone.
Ranked: The World’s Top Diamond Mining Countries, by Carats and Value
Who are the leaders in rough diamond production and how much is their diamond output worth?
Ranked: World Diamond Mining By Country, Carat, and Value
Only 22 countries in the world engage in rough diamond production—also known as uncut, raw or natural diamonds—mining for them from deposits within their territories.
This chart, by Sam Parker illustrates the leaders in rough diamond production by weight and value. It uses data from Kimberly Process (an international certification organization) along with estimates by Dr. Ashok Damarupurshad, a precious metals and diamond specialist in South Africa.
Rough Diamond Production, By Weight
Russia takes the top spot as the world’s largest rough diamond producer, mining close to 42 million carats in 2022, well ahead of its peers.
Russia’s large lead over second-place Botswana (24.8 million carats) and third-ranked Canada (16.2 million carats) indicates that the country’s diamond production is circumventing sanctions due to the difficulties in tracing a diamond’s origin.
Here’s a quick breakdown of rough diamond production in the world.
|5||🇿🇦 South Africa||9,660,233|
|10||🇸🇱 Sierra Leone||688,970|
|18||🇨🇮 Cote D'Ivoire||3,904|
|19||🇨🇬 Republic of Congo||3,534|
Note: South Africa’s figures are estimated.
As with most other resources, (oil, gold, uranium), rough diamond production is distributed unequally. The top 10 rough diamond producing countries by weight account for 99.2% of all rough diamonds mined in 2022.
Diamond Mining, by Country
However, higher carat mined doesn’t necessarily mean better value for the diamond. Other factors like the cut, color, and clarity also influence a diamond’s value.
Here’s a quick breakdown of diamond production by value (USD) in 2022.
|5||🇿🇦 South Africa||$1,538M|
|9||🇸🇱 Sierra Leone||$143M|
|19||🇨🇬 Republic of Congo||$0.20M|
|20||🇨🇮 Cote D'Ivoire||$0.16M|
Note: South Africa’s figures are estimated. Furthermore, numbers have been rounded and may not sum to the total.
Thus, even though Botswana only produced 59% of Russia’s diamond weight in 2022, it had a trade value of nearly $5 billion, approximately 1.5 times higher than Russia’s for the same year.
Another example is Angola, which is ranked 6th in diamond production, but 3rd in diamond value.
Both countries (as well as South Africa, Canada, and Namibia) produce gem-quality rough diamonds versus countries like Russia and the DRC whose diamonds are produced mainly for industrial use.
Which Regions Produce the Most Diamonds in 2022?
Unsurprisingly, Africa is the largest rough diamond producing region, accounting for 51% of output by weight, and 66% by value.
|Rank||Region||Share of Rough|
Diamond Production (%)
|Share of Rough
Diamond Value (%)
However diamond mining in Africa is a relatively recent phenomenon, fewer than 200 years old. Diamonds had been discovered—and prized—as far back as 2,000 years ago in India, later on spreading west to Egyptian pharaohs and the Roman Empire.
By the start of the 20th century, diamond production on a large scale took off: first in South Africa, and decades later in other African countries. In fact between 1889–1959, Africa produced 98% of the world’s diamonds.
And in the latter half of the 20th century, the term blood diamond evolved from diamonds mined in African conflict zones used to finance insurgency or crime.
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