The Cost of Trying to Time the Market

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 to ensure that you’re in the position to capture what the market has to offer.

• A hypothetical $1,000 turns into $121,353 from 1970 through March 17, 2020.
• Miss the S&P 500’s five best days and the return dwindles to $77,056. Miss the 25 best days and that’s $26,989.
• 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.

Past performance is no guarantee of future results. This information is provided for educational purposes only and should not be considered. investment advice or a solicitation to buy or sell securities. There is no guarantee an investing strategy will be successful. Investing involves risks including possible loss of principal. Diversification does not eliminate the risk of market loss.

Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio.

All expressions of opinion are subject to change. This article is distributed for informational purposes, and it is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, products, or services. Investors should talk to their financial advisor prior to making any investment decision.

Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission.