Quick Read
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SPDR S&P 500 ETF (SPY) returned 28% over the past year, yet investors who attempted market timing by selling during April’s VIX spike near 30 would have missed the recovery and needed to get the exit and reentry right to match that gain. Fidelity data shows a $10,000 investment from 1988 through 2023 grew to $417,995, but missing just the five best trading days cut final returns to $264,000, and missing fifty best days reduced the portfolio to $32,000—a 92% loss of gains.
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Equity market returns cluster on a small number of days, especially near market bottoms when fear peaks, making it mathematically impossible for most investors to time entries and exits correctly.
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On a recent episode of the Money Guy Show titled Even Smart People Make These Massive Money Mistakes, co-host Bo Hanson shared a truly painful reality about personal finance. He explained how trying to time the market can completely gut a portfolio, noting that missing just fifty of the best days can wipe out a staggering 92% of your long-term gains.
The stakes are incredibly concrete, as a basic $10,000 investment that stayed fully invested from 1988 through 2023 grew into $417,995 across more than twelve thousand trading days. If you miss just the five best days out of that entire multi-decade run, your final balance plummets to $264,000. That means you leave roughly $154,000 on the table just for sitting out less than a single week.
The Verdict: Hanson Is Right, and the Math Is Brutal
The advice to stay invested is a direct consequence of how equity returns are distributed. A small number of trading days carry most of the long-term gain, and those days cluster near the bottom of selloffs, when fear is highest, and the temptation to sell is greatest.
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Here is the full damage table from the same Fidelity data set that the Money Guy team referenced. Each row assumes you missed only the best days in the period and stayed fully invested for every other session.
|
Days Missed (Best) |
Ending Value of $10,000 |
|---|---|
|
Zero (fully invested) |
$417,995 |
|
5 best days |
$264,000 |
|
10 best days |
$191,000 |
|
30 best days |
$71,000 |
|
50 best days |
$32,000 |
Looking closely at that bottom row reveals that skipping just fifty sessions out of 12,775 cut the final balance from roughly $418,000 down to $32,000. That drop represents the exact 92% haircut Hanson warned about. The investor remained in the market for 99.6% of all trading days but still lost almost the entire gain.
