How important is it to stay invested?

One of the easiest things we can do as investors is to simply stay invested. Over a 30 year period, as an investor, if you missed the best days in the market your returns would have been significantly lower. Unfortunately, it would be nearly impossible to predict when those best 50 days would be, so the only sure way to make sure you benefit from them is to keep your money invested and stick with the plan.

Missing the best days

Bad news: It’s hard to predict when the best days in the market will be.

Good news: If you stay invested, you never need to.

30 years staying invested: 6.73% average return
Missing 10 best days: 4.15% average return
Missing 50 best days: ‑1.64% average return

No one can predict which 50 days those will be over 30 years!

Data: March 20, 1990 through March 19, 2020 for S&P 500 Index. Best days are calculated using daily returns. Percentages are based on average annualized S&P price return. For illustrative purposes only. An index is unmanaged and not available for direct investment. A price index is not a total return index and does not include the reinvestment of dividends. Past performance is no guarantee of future results.