Why Staying Invested Matters—Even When Markets Are Volatile
- mackenziestussie
- 7 days ago
- 2 min read
During periods of market turmoil, it’s natural to feel uneasy. Big drops in portfolio values can trigger a very human response: the urge to get out of the market and “wait for things to settle down.” This instinct is rooted in what psychologists call loss aversion—the idea that losses feel significantly more painful than the pleasure of equivalent gains.
But while this reaction may feel like a form of self-protection, history shows it can be incredibly costly to your long-term financial success.
Timing the Market Rarely Works in Your Favor
Let’s consider what happens when investors try to avoid market downturns by moving to cash. While they may succeed in avoiding some short-term losses, they often miss the powerful rebound that tends to follow. In fact, seven of the ten best days in the market over the past 20 years occurred within two weeks of the ten worst days.
That’s not a coincidence—it’s a reminder that markets often recover sharply and unpredictably. If you step out of the market, even for a short time, you risk missing those key days of growth.
The Cost of Missing the Market’s Best Days
The chart below illustrates the impact of being out of the market at the wrong time. It compares the growth of a $10,000 investment in the S&P 500 from January 2005 to December 2024 under several scenarios:
An investor who stayed fully invested saw their $10,000 grow to $71,750, an annualized return of 10.4%.
Missing just the 10 best days cut that return nearly in half, down to $32,871.
Missing the 40 best days resulted in a negative return—just $8,905 from the original $10,000.
And missing the 60 best days would have left the investor with only $4,712.
These numbers are powerful. They reinforce the idea that time in the market is far more valuable than timing the market.
Stay the Course with a Long-Term Strategy
While it may feel counterintuitive, staying invested through volatility is often the most effective way to capture long-term market growth. That’s why we emphasize building a well-diversified portfolio aligned with your goals—and then having the discipline to stick with it, even when the market feels uncertain.
At Whitener Capital Management, we help clients stay focused on the bigger picture. Emotional decisions can derail even the best financial plans. By maintaining a consistent, long-term approach, you give yourself the best chance for success—especially when it comes to retirement.
The information provided in this blog is for informational and educational purposes only and should not be considered investment advice. Whitener Capital Management is a Registered Investment Advisory firm. All investments involve risk, including the possible loss of principal. Past performance is not indicative of future results. Before making any investment decisions, you should consult with a qualified financial professional to assess your specific financial situation and objectives.
