If you're tempted to cash out your stocks right now because your portfolio has had a rough few weeks or months, doing so could not only result in you losing money now, but also forfeiting robust future returns. In this segment of Backstage Pass, recorded on Nov. 1, Fool contributor Rachel Warren explains why it's important to look at the market's performance over the long term rather than focus on its near-term movements.
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Rachel Warren: Today the market closed at record highs with both the S&P 500 and the Dow Jones achieving record gains. Also fueled by a broad surge in small-cap stocks. The market is closed. Regardless of what's happened today, I'm going to repeat a mantra that Brian Withers does often on this show: It has been a great decade for stocks on the S&P 500.
I am going to share my screen really quick to show you just how great a decade it has been. If you look here, over the last decade, the S&P 500 has achieved a total return of more than 350%, and that is just awesome. I think on days like today when the market closes at a record high, obviously investors get excited. October was a bumpy month.
On those bumpy days, you check your portfolio, maybe you see some of your favorite holdings are down, it's no fun. I understand, I feel the same way.
But I think when you look at the market's performance over the long term throughout those highs and lows, throughout those bumps in the road, you see a 350% total return, it's a great reminder of why it's so important to stay invested throughout all those ups and downs.