Put time on your side

by Daniel Prince, CFA, U.S. Head of iShares Core ETFs , Blackrock

Time spent in the market is important – asset allocation ETFs can help.


  • Waiting for the “right time to invest” may mean missing key market moments
  • iShares asset allocation ETFs make it possible to invest in a diversified portfolio with as little as one share
  • These ETFs may be worth considering when you have cash ready to invest

“Perfect is the enemy of good.” This time-tested saying applies to many walks of life -- but does it also apply to your investment decisions?Many individuals have cash ready to invest, but with so many different investment options it can be hard to narrow down your choices to select a product that meets your financial needs.

This “analysis paralysis” could leave investors on the sidelines during important market moments, potentially missing out on future growth.

Missing top-performing days can hurt your return

Diligent investors naturally spend a lot of time researching different ideas and choosing the vehicle that may be best for their financial goals. While considering different investments is important, you may also want to focus your energy on ensuring you’re positioned to invest your excess capital to capture market growth over time.

There may be a downside to waiting.

If your U.S. equity investments missed the 5 best performing days over the last 20 years, your portfolio could have lost nearly a third of its potential value. As shown in this illustration, if you were unfortunate enough to miss the 25 of the S&P 500’s best days, you’d have less money than you started with. Here, you can think of the market like a well-known arena rock band: it’s the “big hits” that make the crowd go home happy.



Hypothetical investment of $10,000 in the S&P 500 index over the last 20 years (2000 to 2020)

Chart: Hypothetical investment of $10,000 in the S&P 500 index over the last 20 years (2000 to 2020)Source: Morningstar and BlackRock as of 12/31/2020. The S&P 500 Index is an unmanaged index that is generally considered representative of the US stock market. Chart data references the top five, 15 and 25 days over the period. Index performance is for illustrative purposes only. Index performance does not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results. All figures in USD.

Time is a valuable asset

Taking decisive action may provide long-term benefits as well. Consider two hypothetical investors with 30 years until retirement. For the first 15 years, Investor A contributes $1,000 every year then watches it grow. Investor B does not start investing until 15 years later but contributes a larger sum of $3,000 each year until year 30. Assuming both investors earn 10% each year, investor B contributes 3 times as much but ends up with almost $40,000 less. Both investors build themselves a better financial future, but being decisive and starting sooner gives investor A an edge.

Hypothetical growth assuming a 10% annual return

Chart: Hypothetical growth assuming a 10% annual returnSource: BlackRock as of 5/31/2021. For illustrative purposes only and is not indicative of the performance of any actual fund or investment portfolio.  Does not include commissions or sales charges or fees. Past performance does not guarantee or indicate future results. The average annual return of the total U.S. stock market over the period July 1926 to April 2021 was 10.25%. 10% is used as an approximation of the actual average return realized over the last 95 years. Source: Fama and French

Time in the market is more important than timing the market

For most individual investors, the thought of losing money is scary.  So, it is natural to worry whether now is the best time to invest. Nobody wants to invest right before the next downturn, but even if a hypothetical investor had the misfortune of investing in U.S. stocks at their peak before past market crises, they would likely have realized growth if they stayed invested for the long-term.

What if you invested right before a market crash?

Chart showing hypothetical investments before and after market crises Source: Fama and French using daily total returns for the U.S. stock market. The dataset covers the period July 1, 1926 to April 30, 2021. Returns are calculated for the 1-year, 5-year, 10-year, and 20-year periods (where available) after the stated investment date. Market drawdown measured as the subsequent loss from the listed peak date. Past performance does not guarantee or indicate future results. For illustrative purposes only and not indicative of the performance of any actual fund or investment portfolio.  Does not include commissions or sales charges or fees. 

Investing earlier and staying invested over the long-term can put the power of time on your side. ETFs make it fast and easy to invest across a diversified portfolio of stocks and bonds, which may make it easier to make investment decisions. For example, the iShares Core Growth ETF Portfolio (XGRO) holds roughly 9,000 stocks and 10,000 bonds1. These “all in one” ETFs also exist for investors with various risk targets, ranging from conservative, balanced, all the way to aggressive, which differ by how much of the fund is invested in stocks vs. bonds.

  • For investors who seek broad market exposure, the iShares Core ETF Portfolio suite can help you tune out the market noise and maintain a long-term focus.
  • For investors who seek sustainable investment, the iShares ESG ETF Portfolio suite can help you achieve both your investment goals and sustainability objectives.

These low-cost vehicles may be easy ways for investors to maximize their “time in the market” while continuing to research additional solutions that work for them.

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