“Stay invested” is a piece of financial advice you have likely encountered many times.
While it is true that past performance does not guarantee future results, we have identified four reasons why remaining invested can be advantageous over the long term.
Ultimately, diversification, time spent in the market, and a steady head can guide consider your options before exiting the market. There is a possibility you might miss some of the best days in the market, and if you do, you risk losing out on critical growth opportunities, which can have significant consequences. The annualized performance of being fully invested in the S&P 500 over the last 20 years would have offered an average annualized return of 11.3%. However, if you missed just 10 of the best days, your return would have been cut by more than half.
Performance of the S&P 500: Missing the best days
Past performance is no guarantee of future results. It is not possible to invest directly in an index.
The above is a hypothetical example for illustrative purposes only and should not be relied upon in making an investment decision. These examples do not reflect actual or future performance results of any specific vehicle, and are based solely on the hypothetical illustration cited.
Time horizon matters
The longer you remain invested, the more confident you can feel regarding the probability of generating a positive return. While markets can certainly experience a bad day, week, month, or even year, history suggests that investors have been less likely to suffer losses over extended periods—particularly when holding a diversified portfolio. While 12-month stock returns have fluctuated significantly since 1950 (ranging from +60% to -41%), a 60/40 blend (60% stock and 40% bond allocation) has only suffered a -1% annualized return over any five-year rolling period in the data set. Furthermore, the longer you stay invested, the narrower the range of outcomes becomes.
Range of stock, bond and blended total returns
Strategas/Ibbotson, J.P. Morgan Asset Management. Returns shown are rolling monthly returns from 1950 to the present. Stocks represent the S&P 500 Shiller Composite, and Bonds represent Strategas/Ibbotson government bonds for periods from 1950 to 2017, then Bloomberg Finance L.P. Barclays U.S. Treasury Total Return index from 2017 to the present. 60/40 portfolio is rebalanced monthly and assumes no cost. Data as of June 30, 2026.
All-time highs don’t alter the outcome
You might be thinking: “I get it. Volatility is normal. Long-term investors are rewarded for weathering the storm. But what about all-time highs? I should reap my rewards when things can’t get better than that.” Regardless of where the equity market stands—whether near an all-time low or an all-time high—longer-term outcomes are not actually that different. History reveals that if you invested at an all-time high, your average return in the S&P 500 three months later is 2% and one year later is 14%. If you invested on any random day, your average return is relatively similar at 3% and 12% respectively. Any way you look at it, it is often worth it to get invested and stay invested.
You’ll always have something to worry about
In 2020, concerns were centered on COVID-19 and the U.S. presidential election. In 2022, the focus shifted to inflation and rapidly rising interest rates. Today, investors are weighing tariffs, geopolitical conflict, questions about the path of interest rates, and the market impact of artificial intelligence. Reminding yourself of what investors have endured, and where we stand today, is important. Since the start of 2020, around the onset of COVID-19, a 60% stock and 40% bond allocation has, in some cases, returned more than 70% cumulatively. It is not about dismissing prevailing risks, but rather remembering that markets tend to focus on fundamentals over time.
At the end of the day, staying invested and adhering to a long-term plan may help investors avoid emotionally driven decision-making that can result in poorly timed mistakes. Diversification, time in the market, and a steady hand may play a part in achieving your long-term financial goals.
Diversification does not guarantee a profit or protect against a loss.
