Visualizing the Value of Time in the Stock Market

April 18, 2022

Some of you learn faster with pictures than words.

If you are that kind of learner, you might want to stare a bit at the above image from one investment firm’s research department.1 If you need to zoom in a bit more, click here.

You’ve probably heard the common investment phrase, “It’s not timing the market, but time in the market.” Enjoy the summation of that sentence in a picture.

You might invest and sit in the red or relatively flat for a while. Years even.

If you just started investing recently, you are likely in the red now.

But over time it can turn green. Often deep green.

Keep that image as a keepsake, so you can go back to it when your investments splatter red. You will need the reminder.

As the chart indicates, the holding period—the time in—is what matters significantly. In my article Investing is Not a Casino history has shown a 90% probability to make money after 10 years of investing in the S&P 500, and a 100% probability after 20 years in US markets.

We all want the hot tip of prescience, when the key to going green normally requires patience.