Did you know that if you could have avoided the 10 worst days of each year for the S&P 500 Index since 1990, you would have been higher every single year with average annual gains of close to 40%? Of course, saying you’ll do that—and actually being able to accomplish it—are two totally different things.
What if you missed the 10 best days of the year? Well, in that case, you would have been down on average 13.6% a year since 1990. Per Ryan Detrick, Senior Market Strategist, “Let’s get one thing straight, no one can predict the 10 best or 10 worst days of the year. Although it would be fun to somehow do this, the exercise hammers home how for the average investor, being invested and not making a lot of short-term bets is likely the best way to accumulate long-term wealth.”
Here are some key takeaways:
- Even if you missed the 10 best days of each year, you would have still been in the green five times (1991, 1995, 1996, 1997, and 2013)
- If you missed the 10 worst days and the 10 best days in 1993 and 2005, you had the smallest difference at 28.2%
- If you missed the 10 worst days in 2009, you added 88.8% for the year—which is the largest gain
- If you missed the 10 worst days and the 10 best days in 2009, you had the widest difference at 107.5%
- If you missed the 10 worst days in 2011, your return went from 0% to 48.1%—which is the largest swing
The opinions voiced in this material are for general information only and are not intended to provide or be construed as providing specific investment advice or recommendations for any individual security.
Past performance is no guarantee of future results.
The economic forecasts set forth in the presentation may not develop as predicted.
Investing in stock includes numerous specific risks including: the fluctuation of dividend, loss of principal and potential illiquidity of the investment in a falling market.
The S&P 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
This research material has been prepared by LPL Financial LLC.
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