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Staying invested: The cost of cashing out during a market sell-off

Market timing can lead to missed rallies and lower returns. Stay invested for long-term growth.

April 2026, In the Loop

Investors are often tempted to try to time the stock market, aiming for maximum gains by buying low and selling high. However, market timing can cause them to miss out on significant market rallies, potentially resulting in substantially lower returns. Instead, consider a strategic allocation to stocks for long-term growth.

The case for staying invested 

The bar chart below illustrates how a long-term investment strategy can generate much higher returns. Let’s examine three individuals, each starting with USD 10,000 in the S&P 500 over the past 20 years.

Investor 1: Stayed invested and ended up with USD 70,619.

Investor 2: Missed the 10 best days, resulting in USD 25,866.

Investor 3: Missed the 20 best days, ending with a balance of USD 11,177.

Staying invested produced a bigger balance over the long term

(Fig. 1) USD 10,000 invested in the S&P 500 (January 1, 2005–December 31, 2025)

Past performance is not a guarantee or a reliable indicator of future results.
Sources: Analysis by T. Rowe Price, S&P. See Additional Disclosures.
It is not possible to invest directly in an index. Graph is shown for illustrative purposes only.

For office use only: 202604-5398475

The risks of market timing

These figures underscore the risk of trying to time the market. Short-term investors who mistime their market entries and exits could miss the best days and leave substantial returns on the table. By focusing on long-term goals and adopting a strategic allocation approach, individuals can benefit from growth potential over time.

A balanced approach can be both a driver and a buffer

No single long-term investment will both safeguard investors from market volatility and provide the necessary growth potential to achieve their goals. Instead, they typically rely on a mix of diversified investments across asset classes. Individuals who balance stocks (with their potential for higher absolute returns) and bonds (with their durability, income, and predictability) have historically seen less dramatic swings in their portfolios. Balanced investors trade some of the return upside of an all-equity portfolio for less severe portfolio drawdowns and lower average losses in down market years.

Balanced portfolio performance

(Fig. 2) 30 years ended December 31, 2025

  40% Stocks
60% Bonds		 60% Stocks
40% Bonds		 80% Stocks
20% Bonds		 100% Stocks
Return for best year 18.9% 23.6% 28.4% 33.4%
Return for worst year -14.8 -22.1 -29.8 -37.0
Average annual nominal return 6.9 8.2 9.3 10.4

These hypothetical portfolios combine stocks and bonds to represent a range of potential risk/reward profiles. For each allocation model, historical index data are shown to represent how the portfolios would have fared in the past. Figures include changes in principal value and reinvested dividends and assume the portfolios are rebalanced monthly. It is not possible to invest directly in an index. This does not represent an actual investment nor T. Rowe Price product and does not reflect fees and expenses associated with investing. Past performance is not a guarantee or a reliable indicator of future results.
Sources: T. Rowe Price, created with Zephyr StyleADVISOR; Stocks: S&P 500 Index, which represents the 500 largest companies in the U.S.; Bonds: Bloomberg U.S. Aggregate Bond Index, which represents the intermediate-term investment-grade bonds traded in the U.S.

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Risk Considerations: Fixed income securities are subject to credit risk, liquidity risk, call risk, and interest rate risk. As interest rates rise, bond prices generally fall. Investments in high yield bonds involve greater risk of price volatility, illiquidity, and default than higher-rated debt. Investments in bank loans may at times become difficult to value and highly illiquid; they are subject to credit risk, such as nonpayment of principal or interest, and risks of bankruptcy and insolvency. Stock investing involves risks including possible loss of principal. Diversification cannot assure a profit or protect against loss in a declining market. Index performance is for illustrative purposes only and is not indicative of any specific investment. Its performance does not reflect the expenses associated with the active management of an actual portfolio. It is not possible to invest directly in an index.

Additional Disclosures

Please see vendor indices disclaimers for more information about the sourcing information: www.troweprice.com/marketdata. For U.S. and Canadian investors, visit troweprice.com/glossary for definitions of financial terms.

Important Information

This material is being furnished for informational and/or marketing purposes only and does not constitute an offer, recommendation, advice, or solicitation to sell or buy any security.

Prospective investors should seek independent legal, financial and tax advice before making any investment decision. T. Rowe Price group of companies including T. Rowe Price Associates, Inc. and/or its affiliates receive revenue from T. Rowe Price investment products and services.

Past performance is not a guarantee or a reliable indicator of future results. All investments involve risk, including possible loss of principal.

Information presented has been obtained from sources believed to be reliable, however, we cannot guarantee the accuracy or completeness. The views contained herein are those of the author(s) as the date noted in the material and are subject to change, and may differ from the views of other T. Rowe Price Group companies and/or associates. Under no circumstances should the material, in whole or in part, be copied or redistributed without consent from T. Rowe Price.

All charts and tables are shown for illustrative purposes only. Actual future outcomes may differ materially from any estimates or forward‑looking statements provided.

The material is not intended for use by persons in jurisdictions which prohibit or restrict the distribution of the material and in certain countries the material is provided upon specific request.

Issued in the USA by T. Rowe Price Investment Services, Inc., distributor and T. Rowe Price Associates, Inc., investment adviser, 1307 Point Street, Baltimore, MD 21231, which are regulated by the Financial Industry Regulatory Authority and the U.S. Securities and Exchange Commission, respectively.

© 2026 T. Rowe Price. All Rights Reserved. T. Rowe Price, INVEST WITH CONFIDENCE, the Bighorn Sheep design, and related indicators (see troweprice.com/ip) are trademarks of T. Rowe Price Group, Inc. All other trademarks are the property of their respective owners. Use does not imply endorsement, sponsorship, or affiliation of T. Rowe Price with any of the trademark owners.

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