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 $697,421 by 2020. 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–March 31, 2020

Bar chart shows the hypothetical growth of a ten thousand dollar investment in the S and P 500 Index from January 1, 1980 through March 31, 2020. If bought and held, the portfolio would have grown to $697,421. Missing just the 5 best days in the market would have reduced the portfolio by 38% to $432,411. Missing the best 10 days results in a total of $313,377, missing the best 30 days results in $115,481, and the missing the best 50 days results in $48,434. This shows how missing even as few as five up days can have a long‐term impact on performance.

Source: Bloomberg Finance, L.P., as of 3/31/2020.

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 the 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: Bloomberg Finance, L.P., as of 3/31/2020.

As shown below, significant gains in the stock market have often occurred following some steep declines. 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.

S&P 500 Index Five-Year Returns from Market Lows

January 1, 1985–March 31, 2020

Bar chart shows the performance of the S and P 500 Index from January 1, 1998 through March 31, 2020. It shows five‐year returns following three events that helped cause market lows during that time period – the 1987 crash, the 2002 Dot Com bubble, and the 2009 Global Financial crisis. The S and P 500 Index returned 118% after the 1987 crash, 121% after the 2002 Dot Com bubble, and 209% after the 2009 Global financial crisis. The average five‐year return during that time period was 83%.

This chart's illustration uses S&P 500® Index daily total returns from January 1, 1985 through March 31 2020 and defines a market low as a decline of 20% or more since 1985. Source: Bloomberg Finance, L.P., as of 3/31/20.

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.