Changes in Value of the S&P 500 Index*
Chart of the Week for May 16, 2008 - May 22, 2008
Securities markets go through up and down periods. Attempts to time these periods are very difficult due to the unpredictable, often short, momentum bursts. Trying to time the market by selling high and buying low is a very difficult task. It’s time in the market, not timing the market that has paid off for investors. The chart above illustrates how a $50,000 investment in the S&P 500 Index weathers the ebb and flow of market cycles.
Lets follow this investment over time. The mid-late nineties stock market boom which peaked in March of 2000 would have boosted the initial investment to almost $150,000. The correction that followed for the next two years dropped the initial investment balance to about $84,000. The next four years of stock market appreciation pushed the initial investment to about $172,000. This brings us to the present, the correction that began in 2007 would place the initial investment at about $151,000, as of March 31, 2008. The cumulative gain for entire time period, would have been just over $100,000.
The short-term changes in the value of an investment are stressful. Short-term market changes are quick, powerful, and often well publicized. Long-term investing requires patience and a knowledge that markets move through peaks and troughs in the life of an investment. It is time in the market, not timing the market that is important when investing for the long-term.
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.
Please consult both the current applicable prospectus and MAKING SOUND INVESTMENT DECISIONS: A Retirement Investment Guide carefully for a complete summary of all fees, expenses, charges, financial highlights, investment objectives, risks and performance information. Investing in mutual funds and other investment vehicles involves risk, including possible loss of the amount invested. Investors should consider the Fund's investment objectives, risks, charges and expenses before investing or sending money. The prospectus contains this and other information about the investment company. Please read the prospectus carefully before investing. All Vantagepoint Funds invested through 401 or 457 plans are held through VantageTrust. Vantagepoint Funds are distributed by ICMA-RC Services LLC, a wholly owned broker-dealer subsidiary of ICMA-RC and member FINRA/SIPC. For a current prospectus, contact ICMA-RC Services, LLC.
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 800-669-7400 or by writing to 777 North Capitol Street, NE, Washington, DC 20002-4240. Para asistencia en Español llame al 800-669-8216. Performance data current to the most recent quarter end is available by visiting www.icmarc.org.