People often think they have terrible luck. If you search on Google for the unluckiest person in the world, you can find a lot of very bizarre stories. One that I found interesting is from a town in Spain. Each year there is a Christmas time lottery run by the Spanish government called “El Gordo,” where the jackpots now reach over a billion dollars. It is even a European-wide phenomenon. I can remember chipping into an office pool when I lived in Switzerland to participate in this massive lottery. A village about three hours northwest of Barcelona was struggling in the aftermath of the global financial crisis. Just before Christmas in 2011, the fortunes of the entire town of Sodeto were about to change. Most of the citizens were in farming or out of work construction workers. All 70 households had won a share of the jackpot, well, except for one. Sodeto was now filled with families experiencing sudden wealth, except for Costis Mitsotakis, a Greek filmmaker who did not buy a ticket. The fortunes of the town flipped for everyone except for him.

The luck of Mr. Mitsotakis is awful, but it made me think about what your returns would look like if you were the unluckiest investor. How would your returns look compared to investing regularly or having “the best” timing? We crunched the numbers and looked back to see what your returns would be if you put your contribution to work on the worst day each year for the past 20 years.

The probability of buying at the worst price in any given year is 0.4% or 1 in 250. To pull this off for 20 consecutive years, well your luck would be far worse than our Greek friend. We set up our calculations so that you have $1,000 to invest in each year. The scenarios we use is to purchase at the highest price of the year, the lowest price, or to invest your $1,000 in a monthly amount ($83.33) on the 15th of each month. I selected the Vanguard Total Stock Market Fund (VITSX) to offer a more diversified mix than just the S&P 500 and this is something you could have easily invested in during this time. All dividends were reinvested.

My expectations were the results would be awful for the unlucky person to buy high for 20 consecutive years. To my surprise, the numbers were much closer than I expected. The dollar-weighted returns investing at the market high each year would give you an average annual return of 8.31%. The best timing and dollar-cost averaging each month easily outperformed. You don’t need to be a CFA Charterholder or CERTIFIED FINANCIAL PLANNER to see that buying monthly or having great timing would lead you to over $20,400 and $16,450 of higher net worth our worst timing scenario. One thing to keep in mind is if you were to have this unfortunate timing, these results would likely still be sufficient to meet your goals.

What are the lessons to learn from this exercise? There are two key takeaways; too much time is spent trying to time our investments and avoid interrupting compounding. A frequent question we get at Beyond Wealth “is this a good time to buy?” The truth is, we have no idea. Time in the market matters more than timing the market. We don’t know if the market will be higher in a day, week, year, or decade later. The longer we stay invested, the odds move more in our favor that we’ll get a positive rate of return and a better rate of return if we have a long term time horizon.

Charlie Munger, the Vice-Chairman of Berkshire Hathaway and Warren Buffet’s longtime investing partner, has said, “The first rule of compounding: Never interrupt it unnecessarily.” This may be the most powerful lesson of this exercise. If you invest, stay invested despite what the markets are doing or what you think they might do in the future. The monthly contribution plan beat even the best timing because you had more time each year to compound your money through price appreciation and dividend reinvestment.

If you have made it this far, you are probably wondering what happened to Costis and how did everyone in the town win the same lottery? It turns out that Costis may not be so unlucky after all. As a filmmaker, he was always looking for a story that called to him. He finally had one. He was able to film and document how sudden wealth would impact the community in Sodeto. Costis lived just far enough out of town that when people were going door to door to sell tickets, they missed his house.

As for how everyone in the town won, the lottery system is different than we have. The Spanish government prints tickets with numbers from 0 to 99,999. The tickets are sold as fundraisers and it is not usual that an entire town or organization will have the same ticket number. You don’t get to select your numbers like our lotteries in the US. In the case of Sodeto, the winning number was 58268.

You don’t need the best luck or to win the lottery to reach your goals. You need a plan that you stick with for the long term.

What If You Were The Unluckiest Investor Ever?