Market timing
Trying to step in and out at good moments instead of staying invested. It requires two correct decisions in a row — when to leave and when to come back.
How to read the number
The difficulty is not the first decision but the second: the exit usually happens on bad news, and the return has to be made while the news is still bad.
When the metric lies
Most of a market's gain arrives on a small number of days, and those days sit right beside the worst ones. Missing the best days in order to avoid the worst changes the outcome more than the drawdown itself.
Also known as: timing the market