The Cost of Missing the Best Days
How missing just 10 of the best trading days destroys returns
Over the past 30 years, the S&P 500 has returned approximately 10.5% annualized. Missing the 10 best days reduces that to approximately 6%. Missing the 20 best days reduces it to approximately 3.5%. The best days cluster during volatility — sitting out 'until things calm down' guarantees missing them.
What history says
Editorial commentary written by ALAN analysts. Figures cited below are analyst-authored context — they are not derived from the chart above and may reflect different windows or sources.
7 of the 10 best days occurred within 2 weeks of the 10 worst days. You cannot capture the best days without also being present for the worst days. They are a package deal.
Even a hypothetical investor who correctly avoided every crash but missed the recoveries would underperform buy-and-hold. The math is asymmetric — upside matters more.
The phrase 'wait for clarity' is code for 'wait until the best days have already happened.' Clarity arrives at higher prices. Always.
Since the best days arrive in the middle of the worst stretches, make staying invested through volatility a written rule with named exceptions — genuine spending needs, allocation bands — because the version of you that sets the rule in calm markets is the only one that will be rational in the storm.