The cost of trying to time the markets
The impact of missing just a few of the market’s best days can be profound, as this look at a hypothetical investment in the stocks that make up the S&P 500 Index shows. Staying invested and focused on the long term helps to ensure that you’re in position to capture what the market has to offer.
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- A hypothetical $1,000 turns into $20,451 from 1990 through 2020.
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- Miss the S&P 500’s five best days and the return dwindles to $12,917.
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- Miss the 25 best days and that’s $4,376.
There’s no proven way to time the market—targeting the best days or moving to the sidelines to avoid the worst. History argues for staying put through good times and bad is the best option.
Missing only a few days of strong returns can drastically impact overall performance.