The Importance of Staying Invested through Volatility
Market volatility often feels like an emotional rollercoaster. When portfolios take a sharp dip, our natural instinct may be to retreat; pulling out of the market to preserve capital and then wait on the sidelines for signs of stability before reinvesting. History has shown that this instinctive move can negatively impact your portfolio's potential for long-term growth in a significant way. The charts below illustrate why staying invested in the S&P 500, even through turbulent times, is crucial for capturing the market’s full potential when you have a long-term investment horizon.
While time and severity may differ, throughout stock market history, any time there has ever been a market crash it has been able to recover and move on to hit new all-time highs.
The worst days in the market are typically followed by the market's best days, and it is extremely difficult to predict what day the market will bounce back.
Pulling your money out too quickly during a market decline could have a harmful impact on your investment's potential growth, especially if you miss out on the market's best days.
A recent example of how missing out on the market's best days can be harmful to long term growth:
Sources:
< https://www.morningstar.com/economy/what-weve-learned-150-years-stock-market-crashes >
< https://fmpwa.com/the-cost-of-missing-the-10-best-days-in-the-stock-market/ >
< https://www.cnbc.com/2025/04/07/selling-out-during-the-markets-worst-days-can-hurt-you-research.html >
< https://awealthofcommonsense.com/2025/05/the-sunk-costs-of-market-timing/ >
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