(So) What If You Miss the Market’s N Best Days?

Over the past quarter century, a persistent myth about market timing has survived despite being both intuitive and deeply misleading: the idea that “missing just a handful of the best days” will devastate long-term returns. The original analysis, now updated with out-of-sample data through recent years, shows this argument is structurally flawed because it focuses only on missing the best days while ignoring the equally powerful effect of avoiding the worst days. When you examine both sides symmetrically, you find that extreme timing—being all in or all out around a few specific days—can make results look wildly good or bad, but those scenarios are unrealistic and unhelpful for real investors.

For advisors and clients, the real takeaway is not that market timing is harmless, but that it’s dangerous for a different reason: most investors lack reliable skill at it and end up randomly deviating from an appropriate diversified allocation. The better case against market timing rests on humility about forecasting ability and discipline around staying invested in a sensible portfolio, rather than on catchy but misleading “best days” charts that oversimplify risk and reward.