FINANCIAL FOCUS: STAY INVESTED AND YOU'LL BE REWARDED

This "Financial Focus" column is prepared by Edward Jones Investments, headquartered in St. Louis. Jones includes branches throughout the nation, including Cape Girardeau and Jackson.

The stock market has enjoyed amazing growth in the past decade, but there are still those who stay away from stocks for fear of losing money. If this describes you, perhaps a few facts will help you understand the value of stock investing.

There are no guarantees with stock investments, but history has shown that the odds are in your favor. Consider the track record of the Standard & Poor's 500 Index from 1937 through the end of 1997, a 61-year period. The index achieved gains in 46 of those years, with losses in only 15 -- that's better than 3-to-1 odds. And the index's average annual compound return over those 61 years was more than 11.5 percent.

Sure, the stock market experiences declines. Just last year, the Dow Jones industrial average lost 19 percent from July to August. The previous bear market occurred in 1990, when the Dow lost more than 21 percent.

But there are bigger risks in not being invested. To illustrate, consider the 20-year period from year-end 1977 to year-end 1997. A hypothetical $1 invested in the S&P 500 for the entire period would have grown to $21.75, assuming reinvestment of all income.

But if that $1 had missed the best 15 months, its worth would have been only $5.50 = slightly better than the $4.08 it would have been worth if it had been invested in 30-day U.S. Treasury bills over the same period. Being out of the market only 6 percent of the time would have cost your investment about 75 percent of possible gains.

Getting out may seem like a good option at times, but the question then becomes, when do you get back in? When investors think the market has hit bottom, they may wait to see some confirmation. By then, the best days of the recovery may be gone. Successfully timing the market is nearly impossible.

Smart investors stay invested through short-term declines, because they know that, over time, the odds are in their favor. Choose high-quality investments, stay in long enough, and you'll win.

This "Financial Focus" column is prepared by Edward Jones Investments, headquartered in St. Louis. Jones includes branches throughout the nation, including Cape Girardeau and Jackson.

The Southeast Missourian does not recommend that readers buy or sell stocks featured in this column, which is provided for informational purposes only.