Investors hear a common refrain

Investors hear a common refrain year after year: "It's better to buy and hold and ride out the downturns. Missing only the 30 best days of market returns can meaningfully lower your portfolio value."

“It's better to buy and hold and ride out the downturns. Missing only the 30 best days of market returns can meaningfully lower your portfolio value”

GammaRoad tests buy-and-hold strategy

Using the S&P 500 Total Return Index since January 4, 1988, a buy-and-hold investor earned an 11.46% annualized return through July 31, 2026, turning $1 into $65.48.

Missing best days cuts returns

Missing only the market's 30 best days over that same span cuts the annualized return to 6.32%, leaving that $1 at just $10.60. That's a loss of roughly 84% of the wealth a buy-and-hold investor would have built.

Worst days yield higher returns

Run the same exercise on the market's 30 worst days instead, and a $1 investment that avoided them would have delivered a 17.41% annualized return and grown to $487.56. That's more than seven times what buy-and-hold produced.

Best and worst days cluster

Since 1988, a best or worst day has occurred within 21 trading days of another best or worst day more than 70% of the time. The single most common gap between them was one day.

Worst days happen during bear markets

Nearly all of these days showed up during bear markets: On average, the S&P 500 had already fallen 29.17% from its prior peak by the time one of these best or worst days occurred.

Drawdowns require large recoveries

A -10% drawdown requires an +11.11% rally to get back to even, a -25% drawdown requires a +33.33% rally, a -40% drawdown requires a +66.67% rally, and a -50% drawdown requires a +100% rally just to break even.

Time matters for investors

For an investor with a real deadline, retirement in five years, a child's tuition bill, a home purchase, the amount of time it takes to recover from these drawdowns presents material consequences for their lives.