This page shows the importance of staying invested to take advantage of the compounding effect and that investors should look at equity performance on a total return basis by including reinvested dividends (dark green, light grey and blue lines), instead of return on price only (light green line). The role of dividends should not be underestimated as the left chart illustrates how the compounding effect can greatly enhance returns if dividends are reinvested over time. The right chart highlights the challenges in market timing, especially as investors may lose significantly by being out of the market.