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The Myth of "Missing the 10 Best Days"

I'm tired of seeing headlines like "What if you miss the 10 best days of the market?" These articles are designed to scare retail investors into staying fully invested in the market all the time.

But let's think about this argument logically.

  • In order to miss the 10 best days, you would have to have perfect timing to get out of the market the day before each of those days and get back in right after. That's impossible.

  • Why don't we ever see articles about missing the 10 worst days? The returns from missing the worst 10 days are astronomically higher, but that doesn’t fit the often repeated advisor narrative and its equally as impossible to time in practice.

These articles are also based on the assumption that investors should focus on "time in the market versus timing the market". But that's a false dichotomy. There's no reason why you can't do both.

In fact, I believe that a combination of time in the market and strategic market timing can be a very effective way to grow your wealth over the long term.

That's why I'm a big fan of mechanical trading strategies that have been shown to beat the market over long periods of time. These are strategies that buy and sell the market based on pre-defined valuation and technical indicators. They don't rely on human emotions or guesswork.

If you would like to see such a strategy that would have beat the S&P 500 in back testing since 1928, check out www.faithfulwealthbuilders.com.

The Bottom Line:

Don't be afraid to miss the 10 best days in the stock market. That is impossible. Instead, focus on a combination of time in the market and strategic market timing following a proven back tested strategy over many different market cycles and conditions.



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