Market Volatility
Resisting Short-Term Bias
We believe that consistently achieving extraordinary investment results requires a long- term perspective. If you focus on the short term, it’s tempting to let emotions influence your investment decisions.
Help mitigate portfolio volatility and unlock greater growth potential by holding stocks for the long term.
Don’t let short-term upsets dampen your potential for long-term growth. While market downturns can lead to short-term losses, the picture changes with a long-term perspective. The chart below demonstrates the direct correlation between long holding periods and reduced portfolio volatility.
Bottom line: Remaining invested through downturns and corrections may allow you to take advantage of long-term growth potential.
ROLLING 15-YEAR PERIODS DELIVER POSITIVE RETURNS, DESPITE YEARLY MARKET FLUCTUATIONS
S&P 500 Index
As of December 2023
Even as individual years experience losses in the market, staying invested over the long run has historically generated positive returns--as demonstrated here in rolling 15-year periods.
Sources: T. Rowe Price, created with Zephyr StyleADVISOR, and S&P. See Additional Disclosures below. Price return calculations include dividends and capital gains. Annual returns beginning in calendar year 1970.
Rolling 15-year data beginning in 1970. Past performance cannot guarantee future results. It is not possible to invest directly in an index. Chart is for illustrative purposes only.
The stock market has delivered positive returns for every rolling 15-year period covered in our analysis. Exiting the market early could cost you positive returns in the future. As this chart indicates, the market trends upward over long periods of time, despite what's happening on a year-by-year basis.
Reduce volatility, focus on growth
While they can be nerve-wracking, downturns and corrections are normal parts of the market cycle. By maintaining a disciplined approach and staying invested despite these fluctuations, your portfolio is in a better position to achieve positive returns over time.
Additional Disclosures
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Important Information
This material is provided for informational purposes only and is not intended to be investment advice or a recommendation to take any particular investment action.
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