It’s easy to get swayed by momentum in the markets, or by what is popular at a given time. For long-term results, it is important to stay invested and keep your money working for you.

Momentum can be a powerful force, often dragging investors this way and that as technology stocks are in vogue, and then out, and international stocks are up, and then down. Are small cap stocks increasing this month, or are large caps on their way back?

It’s a difficult puzzle to solve, and that is exactly why many financial advisors recommend that you don’t attempt to time the market. Instead, you often may gain better long-term results by simply staying invested in the market over a long period of time. For example, if you simply follow the crowd and chase what is popular, you potentially could be faced with buying high and selling low. In fact, of course, most investors would prefer to buy low and sell high.

Here’s an illustration of why it’s best to stay invested. If you had invested $10,000 in the stock market on December 31, 1996 (represented by the S&P 500) and remained fully invested until December 31, 2001, you investment would have experienced and average annual return of 10.69 percent. However, if you had missed the 10 best days during that period, your return would have been only 1.58 percent. The return percentage declines to a negative 9.77 percent if you had missed the best 30 days of the period, and to a negative 14.02 percent had you missed the 40 best days. (These figures assume the reinvestment of income and do not account for taxes or transaction costs. The S&P 500 is an unmanaged index in which you cannot invest directly. Past performance is not guarantee of future results. Source: Vestek Systems, Inc.) Trying to time the market may result in your missing out on some of the market’s biggest gains. Even in turbulent times, it often pays to remain invested.

Unfortunately, it’s difficult to keep emotion out of investment decisions, especially when you see daily reports of one sector’s decline and another’s rise. But. According to many financial advisors, if you develop a plan for your portfolio that keeps you diversified across many asset classes, you potentially can better weather the market fluctuations.

For more information on market trends or on how to develop a plan best suited to your personal situation, contact your local financial advisor.