Quick Read
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.
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.
Why Timing Fails: The V-Shape Problem
The Money Guy hosts pointed to a structural reason this happens: “Equity markets recover in a V-shape.” Selloffs end abruptly. There is no all-clear bell. The market often posts its biggest single-day gains within a week or two of its worst single-day losses, while sentiment is still terrible.
The past twelve months perfectly illustrate why trying to time these cycles is such a trap. The VIX climbed toward its highest levels of the year in mid-April before drifting back down to 16.76 by May 21, which sits squarely inside the normal 15 to 20 range. Anyone who panic-sold during that spring rough patch needed to be right twice, both on the exit and the reentry. Instead, the S&P 500 ETF is up 28% over the past year.
The Variable That Changes Everything: Your Behavior, Not Your Edge
The factor that determines whether the Money Guy’s advice helps or hurts you is whether you believe you can identify the best days in advance. The evidence says you cannot, and neither can the professionals.
SPIVA data shows 90% of active US large-cap managers underperformed the S&P 500 over the last 15 years. These are full-time professionals with research staff, Bloomberg terminals, and direct access to company management. If nine out of ten of them cannot beat a passive index over a decade and a half, the odds that a part-time trader will correctly skip the bad days and own the good ones are not favorable.
Compare that to the cost of speculative attempts to do better. The American Gaming Association reports that for every $100 bet on sportsbooks, the average expected loss is $9, a 9% haircut that dwarfs the expense ratio on a typical index fund.
What to Actually Do
If you don’t want this to be you, these four steps are the best advice you can read today:
Set your contribution to automatic. If money moves to your brokerage on payday without your involvement, you cannot panic-sell what you never consciously deposited.
Write down your equity allocation today and the date. The next time the VIX prints above 25, reread that note before changing anything.
Run your own missed-days scenario. Pull the S&P 500 daily return series from any free source, sort by best days, and confirm the concentration yourself.
If you must scratch the trading itch, cap it at a small sleeve, perhaps 5% of your portfolio, and benchmark it honestly against the index you would have held instead.
The lesson from the Money Guy table is that timing is expensive, even when you are wrong only a few days out of a lifetime.
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