As the stock market’s volatile movements have created cautious investors, we share a few points about market performance and the problem with trying to predict future behavior.

  • Stock market volatility will likely continue, especially in the current political and economic climate.
  • Long term returns are accentuated by staying committed to a pre-determined asset allocation amid short term volatility.
  • Building a portfolio that reflects your need for risk (expected higher returns) is key to a successful financial plan.

The risk and return profile improves with time.

Note: Volatility is measured as the standard deviation of time-period returns for the return period specified, (i.e., the one-month volatility is the standard deviation of one-month returns).

Sources: Vanguard calculations based on data from Bloomberg, as of January 4, 1988–December 31, 2017.


Timing the market is challenging and an unpredictable strategy. The best and worst trading days can happen close together.

Note: All investing is subject to risk. Past performance is no guarantee of future results. The performance of an index is not an exact representation of any particular investment, as you cannot invest directly in an index.