Waiting on the sidelines can cost you – maybe more than you realize
The “flight to safety” has resulted in an estimated US$5 trillion is sitting in cash or money market accounts1 – and that’s just the U.S. numbers.
The chart below helps to put that into perspective:
- The previous three months set a record for the largest three-month change ever1
- The amount sitting on the sidelines exceeds that of the Great Financial Crisis of 2008-91
Source: LPL Research, ICI June 17, 2020.
It’s time in the markets – not market timing – that matters.
We understand that when market volatility occurs, it may be tempting to pull your money out of the market.
But consider that just missing the top 10 days over the 20-year period cut your investment value in half – from US$32,402to US$16,170.
Source: AGF Investment Operations as at December 31, 2019. For illustrative purposes only. You cannot invest directly in an index. Past returns are not indicative of future results. All amounts are in U.S. dollars.
Watching markets go up and down can be trying. Staying focused on the long term rewards investors. If you’re concerned about market volatility, contact your financial advisor.
1Source: 3 Charts That Have Our Attention. LPL Financial Research, June 18, 2020.
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This post was first published at the AGF Perspectives Blog.
