Miss the worst days, miss the best ones too

There’s a chart that JP Morgan updates every year in their Guide to the Markets. It shows what happens to $10,000 invested in the S&P 500 over 20 years depending on whether you stay invested or try to dodge the bad days.

The numbers are hard to argue with.

The $10,000 experiment

From January 2005 to December 2024, $10,000 invested in the S&P 500 and left alone would have grown to roughly $71,750. That’s a 10.4% annualized return. Not bad for doing literally nothing.

Now here’s where it gets interesting. If you missed just the 10 best trading days over that entire 20-year stretch, your balance drops to about $32,871. That’s a 6.1% return instead of 10.4%. More than half the gains, gone, because of 10 days out of roughly 5,000 trading days.

Miss the best 20 days? You’re down to a 3.6% return. Miss the best 30? Just 1.4%. Miss the best 60 days and your $10,000 actually shrinks to $4,712. You lost money over 20 years in one of the greatest bull markets in history.

Ten days. That’s all it takes to cut your returns in half.

Where those days actually show up

This is the part that makes the stat sting. The best days don’t appear during calm, sunny stretches when the market is quietly grinding higher. They show up during the chaos. Right in the middle of crashes, corrections, and the kind of headlines that make you want to sell everything.

JP Morgan’s data shows that seven of the 10 best trading days in the last 20 years occurred within two weeks of one of the 10 worst days. Not months later. Not after the dust settled. Within 15 days.

Think about what that means. The days where the market rips higher are sitting right next to the days where it falls off a cliff. If you sold to avoid the pain, you almost certainly missed the recovery too.

March 2020: the clearest example

The market was in free fall. Circuit breakers triggered multiple times. Airlines were down 40%. Banks dropped double digits in a single session. The S&P 500 lost over 30% in about five weeks. It felt like the floor had disappeared.

And then, scattered across that exact same stretch, some of the biggest single-day gains in decades.

March 13, 2020: the S&P 500 surged 9.3% in a single day. March 24: another 9.4% gain. These weren’t part of a calm recovery. They happened while the news was still terrible. While hospitals were overflowing. While people were still panicking.

If you’d sold on March 12 to “protect yourself,” you would have missed the 9.3% snapback the very next day. And the market bottomed on March 23, then jumped 9.4% the day after. You couldn’t have timed it if you tried.

2008: same pattern, bigger stakes

October 2008. Lehman Brothers had collapsed. Banks were failing. The government was debating whether to bail out the financial system. On September 29, the S&P 500 dropped nearly 9% in a single session.

Two weeks later, on October 13, 2008, the S&P 500 jumped 11.6%. That’s one of the largest single-day gains in the index’s entire history. And it happened while the crisis was still unfolding. Not after. During.

The people who went to cash in September or early October to “wait it out” missed that 11.6% day. And the ones after it. The market didn’t send a text saying “it’s safe to come back now.” It just started recovering while everyone was still scared.

Why this catches so many people

I watched friends sell in March 2020. Every one of them had the same plan: get out now, get back in when things calm down.

The problem is that “calm” never arrives on schedule. The market doesn’t wait for the news to turn positive before it starts recovering. By the time things feel safe, by the time the headlines shift from panic to optimism, the recovery is already priced in. The biggest gains have already happened.

This is the trap. Selling feels like control. It feels like you’re doing something smart. But the math shows the opposite. The difference between “stayed invested through the scary part” and “went to cash for a few weeks during the scary part” can be tens of thousands of dollars over a couple of decades.

What this actually means for your portfolio

Staying invested during a crash is not fun. Looking at your portfolio down 25% and choosing to do nothing goes against every instinct you have. Your brain is screaming at you to stop the bleeding.

But the data says something simple: the price of admission for the best days is being present for the worst ones. You can’t have one without the other. They come as a package.

Nobody can consistently predict which days will be the worst and which will be the best. Not you, not me, not professional fund managers with teams of analysts. The people who try to dodge the bad days end up dodging the good ones too.

What to do with this

This isn’t a reason to ignore risk or pretend downturns don’t hurt. It’s a reason to have a plan before the downturn happens. Know what you own. Know why you own it. Set up your portfolio so you can ride out a bad stretch without needing to sell at the worst possible time.

If you’re invested in something you believe in for the long term, the answer during a crash is almost always the same: do nothing. Maybe rebalance. Maybe even add to your positions if you have cash. But don’t sell into the panic.

The best days are hiding inside the worst ones. The only way to catch them is to still be there when they show up.