Why a Long-Term Mindset Is Critical
By Dick Friedman, Managing Director, Business Development, Corporate Retirement Solutions
Investment professionals like you, and IRON Financial, as your partner, often counsel our clients with suggestions like “stay the course” and “find a risk tolerance that you are comfortable with and invest for the long term.” This advice has proven sound. It has worked in bull and bear markets and withstood the test of time. But nothing drives a solid point home better than numbers.
The chart below (Fig. 1), by Delaware Funds, helps to illustrate why a long-term mindset is critical.
In the 20 years ending December 31, 2017, the S&P 500 Index was up 7.20%. But if you missed the 20 best trading days during those 20 years, your return would have been reduced to 1.15%. Further, if you missed the 40 best trading days during that same 20 year period, your loss would have been 2.81%.
Fig. 1 Helping DC plan sponsors prepare participants for troubled markets, Jumping in and out of the market may come at a cost, retrieved from Delaware Funds by Macquarie, https://www.delawarefunds.com/dcio/insights/helping-dc-plan-sponsors-prepare-participants-for-troubled-markets, February 6, 2019.
These are great statistics to share with your clients!