The impact of being out of the market for a short time can be profound, as shown by the chart below, using a hypothetical investment in the Russell 3000 Index, a broad US stock market benchmark.
• A hypothetical $1,000 investment made in 1998 turns into $6,356 for the 25-year period ending December 31, 2022.
• Miss the Russell 3000’s best week, and the value shrinks to $5,304. Miss the best three months, and the total return falls to $4,480.
• There’s no proven way to time the market — targeting the best days or moving to the sidelines to avoid the worst. Staying invested and focused on the long term helps to ensure that you’re in position to capture what the market has to offer.
Russell 3000 Index Total Return, 1998 - 2022
See Notes and Disclosures
David Rappaport, CFP®
David is the Co-Founder of Rappaport Reiches Capital Management. He acts as personal CFO to entrepreneurs and corporate executives, providing organization and clarity in their finances. Please connect with David below. He loves to talk about investing, financial planning, and Aspiritech, a non-profit hiring individuals on the autism spectrum.