A striking analysis of the State Street SPDR S&P 500 ETF Trust (SPY) reveals just how brutal mistimed exits from the market can be for long-term investors.
A $10,000 investment made in SPY on October 12, 2006, grew to approximately $82,300 by October 12, 2026, with dividends reinvested over the full period.
Strip out just the fund’s 10 best single trading days, however, and that same $10,000 finishes at only around $35,700, a difference of more than $46,000.
Those 10 days, drawn from a pool of more than 5,000 total trading sessions over two decades, account for roughly 57% of the ending value of a fully invested position.
The analysis used SPY specifically because it was the first exchange-traded fund listed in the United States, having launched in January 1993, giving it a complete 20-year daily price history.
The fully invested $10,000 compounded at around 11% annually, but removing the 10 best days drops that annual return to under 7%, a seemingly small change that produces an enormous gap in outcomes.
The damage compounds quickly as more strong days are excluded, with the ending value falling to around $21,500 when the best 20 days are removed from the calculation.
Perhaps most sobering, an investor who missed the best 40 days over 20 years finished with approximately $9,900, barely recovering the original starting investment after two full decades in the market.
The timing of these critical days is what makes the data particularly instructive for investors tempted to exit markets during periods of fear or economic turmoil.
Six of the 10 best days occurred between October 2008 and March 2009, deep inside the financial crisis, when investor sentiment was at its most pessimistic.
Three more of those pivotal sessions arrived in March and April 2020, as the pandemic was shutting down much of the global economy and uncertainty was running extremely high.
The final best day in the 20-year window was April 9, 2025, a reminder that extraordinary single-day gains can appear at any point during a volatile stretch.
The single best day in the entire 20-year period was October 13, 2008, when the fund surged 14.5%, only for it to lose 9.8% just two days later.
The volatility around March 2020 told a similarly whipsaw story, with the fund dropping 9.6% on March 12, gaining 8.5% on March 13, then falling 10.9% on March 16, its worst day in the full two-decade span.
The broader lesson is that the market’s best days cluster tightly around its worst days, meaning investors who flee during downturns are most likely to miss the subsequent explosive recoveries.
The S&P 500 closed at a record high earlier this month, though it is not considered cheap, currently trading at around 26 times earnings compared to a 10-year average of approximately 24 times, according to FactSet.
