You’ve probably heard the old adage, “The best time to plant a tree is twenty years ago.” This saying is often used to emphasize the importance of beginning to save for retirement as early as possible.
For example, if someone at age 25 begins contributing $200 a month to a retirement account with a 10% annual return (the S&P 500’s long-run historical average), by age 65 they would have about $1 million. But if they waited until age 35 to begin the same contribution, they’d end up with only about $450,000.¹
That’s the power of time when you’re getting compounding returns. Your growing snowball has more chances to go around.
But this is a hypothetical example. You’re not guaranteed a 10% return in any given year. Some years the market makes more and in others makes less or even posts significant declines.
It’s even less of a sure thing when you look at returns on any given day.
Wealth advisor Ben Carlson analyzed daily S&P 500 data for the past 98 years. He found that the average gain for all days was just .03%. That’s a return of three ten-thousandths. And yet the total price return of the market over this period was nearly 40,000%.²
Carlson says, “Since 1950, 46% of all trading days have been losses. But almost 80% of the time the market has been up on a one-year basis. 93% of the time the market has been positive over 5 years. Extend your time horizon to 12 years and it’s been all gains.”
In other words, increasing the amount of time you’re in the market doesn’t just give your money more opportunities to compound; it also gives your portfolio a better chance of realizing market gains.
This is why the prudent investor takes the long-term view. They know that individual good and bad days (or even months) are less important than the discipline to stay in the market while others are cashing out.
For that reason, it’s best to design your financial plan to take advantage of long-term market exposure. Use broad diversification to help safeguard your nest egg, allowing you to participate in unexpected gains while mitigating losses during volatility.
When you’re patient and give your investments time to work, you will reap the benefits in the long run.
SOURCES
1. https://www.investopedia.com/retirement-savings-in-your-20s-and-30s-how-do-you-stack-up-12005499
2. https://awealthofcommonsense.com/2026/05/stories-vs-statistics/
The Guyton Group offers fee-based planning, wealth advisory services, and securities through Park Avenue Securities LLC (PAS) and insurance through The Bulfinch Group Insurance Agency, LLC. Fee-based plans may include tax and wealth planning suggestions, but we do not give tax or legal advice. You should consult your tax or legal advisor regarding your individual situation. Andrew Guyton is an Investment Advisor and Registered Representative of PAS and Financial Representative of The Guardian Life Insurance Company of America (Guardian), supervised from: 160 Gould Street, Suite 310, Needham, MA 02494, 781-449-4402. PAS is a member of FINRA & SIPC and a wholly-owned subsidiary of Guardian. The Guyton Group and The Bulfinch Group are affiliated, but neither firm is an affiliate or subsidiary of PAS or Guardian. The Guyton Group and The Bulfinch Group are not registered in any state or with the U.S. Securities and Exchange Commission as a Registered Investment Advisor. Andrew Guyton, CA Insurance License #0I61971. 9171743.1 Exp 10/28
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