Market Timing, Cash Drag And Past Performance

Cash: "Cash drag" is a common source of performance drag in a portfolio. It refers to holding a portion of a portfolio in cash rather than investing this portion in the market.

How bad is cash drag?

Should he be guided by his past performance to look forward?

 Best  : 12% CAGR
 Worse : 1.6% CAGR

Does cash drag and market timing a serious hit in his performance over the next 10 years?

Current with cash drag : 6% CAGR

Let see what happened when he looks back few years down the road.

Let the data and the Maths do the talking!