While getting out of the stock market may mean avoiding more down days, it also means missing out on the up days when the market bounces back. Investors who stayed invested even after a market decline would have done much better in the long run.
-Paul Kelly, AIF®
“Do Not Try To Time The Market”
Attempting to move in and out of the market can be costly, particularly because a significant portion of the market’s gains over time have tended to come in concentrated periods. Many of the best periods to invest in stocks have been those environments that were among the most unnerving. Investors face long odds in trying to time the ups and downs of the market, and Fidelity data shows they tend to increase their allocations to stocks ahead of downturns and decrease their exposure just prior to market rallies.
Trying to time the market can cost you.
Hypothetical growth of $10,000 invested in the S&P 500 from Jan. 1, 1980 to March. 31, 2015.
Past performance is not a guarantee of future results. The hypothetical example assumes an investment that tracks the returns of the S&P 500® Index and includes dividend reinvestment but does not reflect the impact of taxes, which would lower these figures. There is volatility in the market and a sale at any point in time could result in a gain or loss. Your own investment experience will differ, including the possibility of losing money. You cannot invest directly in an index. The S&P 500®, a market capitalization–weighted index of common stocks, is a registered service mark of the McGraw-Hill Companies, Inc. and has been licensed for use by Fidelity Distributors Corporation. Source: FMRCo, Asset Allocation Research Team as of 3/31/15.
*Article and Data credited by Fidelity Viewpoints Posted: 8/25/2015
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