A Crystal Ball
Major events around the world may have an influence on stock prices, but it is difficult to predict when these events will occur or how they will impact markets. What we observe from previous crises is that stock markets usually rebound.
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 ensure you’re in position to capture what the market has to offer.
The Long-Term Benefits of Having a Plan
- A hypothetical $1,000 turns into $20,451 from 1990 through 2020.
- Miss the S&P 500’s five best days and the return dwindles to $12,917. 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—so history argues for staying put through good times and bad.
Missing only a few days of strong returns can drastically impact overall performance