When investors think about building wealth, they often consider up-market growth, or how much they will achieve if the markets rise. When markets are up, one of the first things investors do is see what their returns are for the day, month, or year. While a rally is always welcome, long-term success of a portfolio isn’t built on short rallies in certain sectors. History has proven time and again that rallies in sectors come and go. What may seem right in the short-term often fails in the long-term. One example of this was the NASDAQ bubble in early 2000 that was driven by the growth of dot-com companies. This ended with three consecutives years down more than -30%, losing more than 73% of value from 2000-2002. Just before the bubble burst, the success of the NASDAQ seemed certain. Up-capture (performance in rising markets) is only one part of the three-act play including down-market capture and down-market recovery. These three factors drive long-term success and compounding. The two ingredients for successful compounding during these three market phases are portfolio efficiency and investor behavior. Upside Capture Up