Think about this:

$10,000 invested in the S&P 500 at the end of 1997 would have grown to $39,925 over 20 years — an average return of 7.17% per year. But what if you weren’t invested during some of the “best” days of that decade?


Missing the 'best' days can be costly

 

Chart of $10,000 investment with missing the best days of stock market returns

Source: Legg Mason. Past performance is no guarantee of future results. These charts and references are for illustrative purposes only and do not represent an actual investment or the performance of any specific investment. The S&P 500 Index is an unmanaged index of 500 stocks that is generally representative of the performance of larger companies in the U.S. An investor cannot invest directly in an index. Unmanaged index returns do not reflect any fees, expenses or sales charges. Dividends are subject to reinvestment.

 

The sobering lesson

Pulling money out of the market in down periods may reduce long-term returns. When the market rebounds, it may happen quickly and suddenly. And missing even a few trading days could mean missing some of the market’s biggest gains. If an investor missed just 10 days, in the 5,052 trading days from January 2, 1998–December 31, 2017, returns could be cut in half.1
 

Missing out on market gains

Just 10 days out of the market could reduce returns by half
Missing Out on Market Gains - Cost of Missing out on the ten best days of the stock market

Source: Legg Mason. Past performance is no guarantee of future results. These charts and references are for illustrative purposes only and do not represent an actual investment or the performance of any specific investment. Principal value and investment returns will fluctuate, and investors’ shares, when redeemed, may be worth more or less than the original cost.

 


 


Your financial advisor can help you develop a long-term investment plan with a balance of strategies that addresses your need for portfolio growth, income, capital preservation and risk management.

 

 

 1 Source: Legg Mason.

All investments involve risk, including possible loss of principal. Past performance is no guarantee of future results. Indexes are unmanaged, and not available for direct investment. Index returns do not include fees or sales charges.

Equity investments generally provide an opportunity for more capital appreciation than fixed income investments, but they are subject to greater market fluctuations.

Diversification does not assure a profit or protect against market loss.

Any information, statement or opinion set forth herein is general in nature, is not directed to or based on the financial situation or needs of any particular investor, and does not constitute, and should not be construed as, investment advice, forecast of future events, a guarantee of future results, or a recommendation with respect to any particular security or investment strategy or type of retirement account. Investors seeking financial advice regarding the appropriateness of investing in any securities or investment strategies should consult their financial professional.