The Cost of Losing the 10 Best Days of the S&P 500 Index

Chart of the Week for May 09, 2008 - May 15, 2008

The value of long-term investing is an important principle to remember as daily market fluctuations generate short-term concern. While the value of stocks may change suddenly at times, it is a good idea to carefully consider your portfolio and how it relates to your goals before making any changes. Making decisions based on short-term performance, or attempting to time the market could lead to poor decisions. Consider the chart above. If $10,000 were invested in the S&P 500 Index on January 1, 1980, it would be worth $131,013 on April 30, 2008. If the same investment missed the ten best performing days, it would be worth $76,581. Missing the 10 best days out of 7,150 days would result in a return worth 42% less.

Because it is so hard to predict when the market will go down and also when it is likely to go back up again, many investors who try to time the market end up selling low and rebuying high. It may be better to be patient, recognizing that short-term market changes are far less important than long-term trends.

This illustration was compiled by information from outside sources. These companies are not affiliated with ICMA-RC. This information is being provided for educational purposes and is not intended to be construed as or relied upon as investment advice. ICMA-RC does not offer specific tax or legal advice. Individuals are advised to consider any new investment strategies carefully prior to implementing.

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The performance data quoted represents past performance. Past performance is no guarantee of future results. Investment returns and principal value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data illustrated. For performance data current to the most recent month end, contact ICMA-RC Services, LLC by calling 1-800-669-7400 or by writing to 777 North Capitol Street, NE, Washington, DC 20002-4240. Para asistencia en Español llame al 1-800-669-8216. Performance data current to the most recent quarter end is available by visiting www.icmarc.org.