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 a position to capture what the market has to offer.
- A hypothetical $1,000 turns into $20,451 from
1990 through 2020.
- Miss the S&P 500’s five best days and the return
dwindles to $12,917. Miss the 25 best days and
that’s $4,376.
- 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. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio.
In US dollars. For illustrative purposes. The missed best day(s) examples assume that the hypothetical portfolio fully divested its holdings at the end of the day before the missed best day(s), held cash for the missed best day(s), and reinvested the entire portfolio in the S&P 500 Index at the end of the missed best day(s). Annualised returns for the missed best day(s) were calculated by substituting actual returns for the missed best day(s) with zero.
S&P data © 2021 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved. Investing risks include loss of principal and fluctuating value. There is no guarantee an investment strategy will be successful.
AUSTRALIA and NEW ZEALAND: This material is issued by DFA Australia Limited (AFS License No. 238093, ABN 46 065 937 671). This material is provided for information only. No account has been taken of the objectives, financial situation or needs of any particular person. Accordingly, to the extent this material constitutes general financial product advice, investors should, before acting on the advice, consider the appropriateness of the advice, having regard to the investor’s objectives, financial situation and needs. Investors should also consider the target market determination that has been made for each financial product either issued or distributed by DFA Australia Limited prior to proceeding with any investment. Go to au.dimensional.com/funds to access a copy of the relevant target market determination. Any opinions expressed in this material reflect our judgement at the date of publication and are subject to change.
