The case for staying invested


Missing a handful of the market's best days can significantly reduce investment returns.

When markets fall, we understand that seeing your investments lose value can feel stressful. In fact, some investors may be tempted to abandon their investment strategy when markets become rocky. However, trying to time the markets can result in missing out on gains.

For example, an investment of $10,000 in the S&P 500® Index in 1980 would have grown to a value of $566,302 by 2016. Yet, missing out on even a handful of the best days over that period would have greatly reduced the portfolio's value.

Hypothetical growth of $10,000 invested in S&P 500 Index

January 1, 1980–December 31, 2016

Bar chart shows the hypothetical growth of a ten thousand dollar investment in the S and P 500 Index from January 1, 1980 through December 31, 2016. If bought and held, the portfolio would have grown to $566,302. Missing just the 5 best days in the market would have reduced the portfolio by 35% to $366,643. Missing the best 10 days results in a total of $273,085, missing the best 30 days results in $108,140, and the missing the best 50 days results in $49,855. This shows how missing even as few as five up days can have a long‐term impact on performance.

Source: FMRCo, Asset Allocation Research Team as of 12/31/16.

We're here to help you through challenges when market volatility occurs. Backed by deep research and experience, we remain patient and disciplined through periods of market distress. By taking a long-term view, investors who stay invested may have a better chance of reaching their financial goals.

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The hypothetical example above assumes an investment that tracks the returns of a S&P 500® Index and includes dividend reinvestment but does not reflect the impact of taxes, which would lower these figures. "Best days" were determined by ranking the one‐day total returns for the S&P Index within this time period and ranking them from highest to lowest. There is volatility in the market and a sale at any point in time could result in a gain or loss. Your own investment experience will differ, including the possibility of losing money. Source: FMRCo, Asset Allocation Research Team as of 12/31/2016.

As shown below, many of the most significant gains in the stock market occurred following significant down periods. Investors who abandon their strategy during a market downturn may miss out on those gains. By taking a long-term view, investors who stay invested may have a better chance of reaching their financial goals.

Top 100 Days in the S&P 500 Index

Performance from January 1, 1996–December 31, 2016

Line chart shows the performance of the S and P 500 Index from January 1, 1996 through December 31, 2016. It plots the top 100 days over that time and shows that some of the market's best days have followed a market decline. Additionally, some of the market's best days occurred during one of two economic recessions highlighted, in 2001 and during the recession of 2008 and 2009.

Source: FactSet. Data as of December 31, 2016. US Stocks represented by daily price returns of the S&P 500 Index.

We're here to help you through challenges when market volatility occurs. Backed by deep research and experience, we remain patient and disciplined through periods of market distress.