Perils of Timing the Market

Stocks go up and down every day, but history shows the chance of incurring a loss in your stock investment declines the longer you remain invested. The graph below shows the cumulative stock market returns with and without the best days in the market.

The chart shows the cumulative total returns, which includes the reinvestment of dividends and capital gains, for the S&P 500 Stock Index for the period January 1, 2000, through December 31, 2019, and cumulative returns for that same time period minus best days as measured by historical price data. This chart is for educational purposes only to demonstrate the effects of market timing.  It is not a promise of any investment’s future returns. Past performance does not guarantee future results.

Related Resources

Investing involves risk. Trying to avoid this risk by timing the market can open you up to more risk. As difficult as it is, don’t let your emotions make your investment decisions and instead periodically evaluate your approach to make sure it in line with your needs. Here’s a list of resources to help navigate through periods of market volatility:

  • Big Picture Planning: How to create an investment strategy to match your account goals.
  • Risks and Costs: Risk is an unavoidable part of investing. Knowing how to plan for risk is a critical step in your investing journey.
  • Handling Investment Risk: Five strategies individual investors can apply to manage risk.
  • Managing Volatility: Financial market volatility – real or anticipated – is often accompanied by a strong emotional reaction. See how that could affect your decision making.

Our team of financial professionals is available to help you manage your investments and avoid the temptation of trying to time the market. Give us a call at 800.258.3030, option 2.