Last year was an unusually good one for stocks. Not only did markets leap higher, but the gains were evenly felt across every sector. Almost all of the Dow Jones Industrial Average's 30 components improved in 2013, and the top five contributors kicked in just 16% of the Dow's total gains, as compared to 59% in 2012.
Yet even through that broad-based, year-long rally, most of the market's gains actually occurred over just a handful of trading days:
In the video below, Fool contributor Demitrios Kalogeropoulos discusses the seven trading days that can explain much of the Dow's rise last year. He notes that they represented just 2.7% of all trading days and yet accounted for a massive 50% of the market's annual rise. The takeaway, he argues, is that jumping in and out of stocks is an extremely risky strategy, as missing just one of these days would have been a recipe for underperformance.
Start 2014 off right
Just as a small percentage of trading days can make all the difference in a year, there's a huge contrast between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report: "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.
Fool contributor Demitrios Kalogeropoulos has no position in any stocks mentioned. The Motley Fool recommends 3M. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.