Think you can effectively time the market? Think again.
March 23, 2020
Market volatility can be unpredictable but maintaining a long-term perspective during volatile times is important, in our view.
Remaining invested through major market events, including the global financial crisis, can be key to achieving an investor’s goals. By deploying this approach, an investment of $100,000, as illustrated in the chart below, would have reached a value of $324,019.*
However, if the investment missed just the top 10 performing days, only about 50% of that value would have been achieved. Likewise, if the investment missed the top 25 performing days, an investor would have only achieved about 25% of the value.
Staying the course through decline and recovery
Growth of $100,000 in the S&P 500® Index (January 1, 2000–December 31, 2019)*
Sources: BlackRock, Bloomberg. Morningstar as of Feb. 28, 2020. US stocks are represented by the S&P 500 Index.
Past performance does not guarantee future results. Investing involves risk, including the possible loss of principal. Performance assumes reinvestment of all distributions and does not account for taxes, fees, and/or expenses.
What this means for investors
A decline in the market can be just as unpredictable as its recovery. However, staying invested and keeping a long-term perspective is important. Despite the short-term effects of market volatility, missing out on just a few top performing days could impact an investment’s full potential for growth.
*The value corresponds to the growth of $100,000 investment during timeframe noted.
Nothing presented should be construed as a recommendation to purchase or sell any security or follow any investment technique or strategy.
The views expressed represent the investment team's assessment of the market environment as of March 2020 and should not be considered a recommendation to buy, hold, or sell any security, and should not be relied on as research or investment advice.
Past performance does not guarantee future results.
Investing involves risk, including the possible loss of principal.
Market risk is the risk that all or a majority of the securities in a certain market – like the stock market or bond market – will decline in value because of factors such as adverse political or economic conditions, future expectations, investor confidence, or heavy institutional selling
The S&P 500 Index measures the performance of 500 mostly large-cap stocks weighted by market value, and is often used to represent performance of the US stock market.
Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.
All third-party marks cited are the property of their respective owners.
Diversification may not protect against market risk.