Understanding Market Volatility
Some investors try to “time” the market or buy and sell based on their guess about what the market will do next. By doing so, they often miss out on the best days. The graph below shows the difference between investors who stayed in the market during volatile periods with those who only briefly left but missed some of the market’s best upswings.
The Power of Staying Invested
Source: American Funds. Past results shown exclude dividends. The index is unmanaged and has no expense. A hypothetical $1,000 investment in the S&P 500 from 1/1/09 to 12/31/18, excluding dividends, grew to $2,775 when invested for the entire period.
Preparation vs. Prediction
When considering your next portfolio change, remember to view any changes in light of your long-term investment strategy. Short-term ebbs and flows of the market are normal and should be viewed in context of your long-term strategy.
IMPORTANT DISCLOSURE INFORMATION
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