StanStu #2: Missing the Best Days
Some weeks ago, I came across the what feels like 27th iteration from one of my favorite Standard Stupidities: a hypothetical calculation of what happens to your returns when you miss the best days of the stock market. The issue was even discussed at a conference held by one of the world‘s leading banks, which I attended at the end of 2024. So I decided to write about it once and for all.
Unlike many other Standard Stupidities, this one is technically not false and often actually used with good intentions. But good intentions don’t save something from being misleading, and I believe serious investors should aim for an intellectually honest and evidence-based view.
- The S&P 500 (obviously) returned less without the best days
- The S&P 500 (obviously) returned more without the worst days
- None of it is really useful (and possible) in practice