10 Days That Cost You Half Your Retirement Portfolio

The Most Expensive Sentence in Investing: “I’ll Just Wait Until Things Calm Down.”

In March of 2020, one of my current clients — I’ll call him Dan, runs a small logistics company in the South Bay — did what a lot of very smart, very successful people did that month.

He panicked, called his former advisor, and moved his entire retirement account to cash.

His reasoning was completely reasonable. A pandemic was starting. Nobody knew what was going to happen. The market was down 30% in a matter of weeks. He told me, verbatim: “I just wanted to wait until things calmed down and get back in.”

Things did calm down. He didn’t get back in.

By the time he sat across from me in the fall of 2021, the S&P 500 had doubled from its March 2020 low. His retirement account, sitting in cash, had earned essentially nothing. In roughly eighteen months, he had missed one of the great buying opportunities of his lifetime — because of a sentence that felt like the responsible, grown-up thing to say.

I’m telling you Dan’s story because the single most damaging investing myth in America — the one that quietly costs successful people millions of dollars of retirement money — is the belief that a smart, informed person can time the market.

The data on this isn’t ambiguous. It’s brutal. And almost nobody talks about it plainly.

What the Numbers Actually Show

Here is what “just waiting until things settle down” has cost investors, on average.

JPMorgan ran the numbers on the S&P 500 for the twenty years ending in 2024. If you put $10,000 in the market on day one and simply left it alone, you ended with about $64,800 — a roughly 10.6% annualized return.

Miss just the 10 best trading days out of nearly 5,000 trading days over those twenty years, and your $64,800 becomes about $32,000. Half.

Miss the thirty best days, and your return drops to about 1.5% a year — roughly the same as a savings account. You took twenty years of stock-market risk to earn a checking-account return.

Fidelity ran a similar study for 1988 through 2024. Investors who stayed put ended with a portfolio worth just over half a million dollars per unit of investment. Miss just the five best days in that entire 36-year period — five days out of about 9,000 — and the portfolio drops 37%. Miss the fifty best days, and you’re down to less than $40,000 from what would have been more than $500,000.

The Punchline Nobody Sees Coming

Here’s the sentence that ties this together — the one I want you to remember every time you feel the urge to “get out for a while.”

Seven of the ten best days in the market historically occur within fifteen days of the ten worst.

Read that again.

The best days and the worst days are essentially glued together. The huge up-days almost always happen right in the middle of the scariest weeks. Which means the person who panics on Monday and moves to cash is almost mathematically guaranteed to miss the rebound day on Thursday. And then the “rebound day” turns into three of them. And then a week. And then the market is 20% higher than where they sold, and now getting back in feels stupid because “the news is still bad.”

That is not a hypothetical. That is precisely what happened in March–April 2020, October–November 2022, and April–May 2025. It’s what will happen the next time, too.

Market timing doesn’t fail because you’re not smart enough. It fails because the days that determine your entire lifetime return come as a small handful of jump-cuts, and they are almost impossible to distinguish from the scariest moments of the cycle in real time.

Why Even Sophisticated People Fall For This

The reason this myth persists is that our brains are storytelling machines. We remember the one time we felt smart about being in cash. We forget the four times we sat too long and missed the recovery. We remember the friend who “sold everything before the crash.” We don’t remember the same friend still sitting in cash three years later, quietly bleeding to inflation.

The academic name for this is outcome bias. Our memory of our own investing decisions is unreliable by design.

Even most professionals can’t do it. In 2025, 79% of actively managed large-cap U.S. equity funds underperformed the S&P 500, according to the S&P SPIVA report. Over the last twenty years, about 92% of them underperformed. These are people who do this for a living, with teams of analysts, and a 92% failure rate over two decades.

If they can’t consistently do it, you and I almost certainly cannot either.

What Actually Works

None of this means “close your eyes and buy stocks and never think about it again.” What it means is:

Have a plan you can actually sit with. The right stock/bond mix is the one you can hold through a scary Monday without picking up the phone. If you can’t stomach 2020 all over again with your current portfolio, the fix isn’t better timing — it’s a better allocation.

Rebalance on a schedule, not a feeling. Twice a year, mechanically, moves you gently toward buying low and selling high, without ever asking you to guess the top or the bottom.

Keep enough cash to sleep. Six to twelve months of living expenses in a boring high-yield account isn’t “sitting on the sidelines.” It’s the thing that lets the rest of your money stay invested when your gut screams to sell.

Have somebody to call before you make the trade. This is the whole point of the job I do. The single biggest dollar-value I add for most clients is not the fund I pick. It’s the phone call I answer at 9:15 a.m. on a red Monday.

How I Can Help

If you’re in a phase where you’re eyeing your portfolio nervously, thinking about “getting out until things settle down” — or if you moved to cash a while back and can’t figure out when it’s “safe” to get back in — that’s exactly the conversation to have before your next move, not after.

I’m a flat-fee fiduciary financial advisor based in Hermosa Beach, California, working specifically with solopreneurs and small business owners.

If you would like to discuss this further, click Book A Meeting.

FAQ: Is Market Timing Worth the Risk?

1. What happens if you miss the best days in the stock market?

Missing even a handful of the market's best-performing days can cut your long-term returns dramatically. JPMorgan's research on the S&P 500 over the 20 years ending in 2024 found that missing just the 10 best trading days — out of nearly 5,000 total — cut a $10,000 investment's ending value roughly in half, from about $64,800 to $32,000. Missing the 30 best days dropped the annualized return to about 1.5%, roughly the same as a savings account, despite taking on 20 years of stock market risk.

2. Why are the best and worst days in the market so close together?

Historically, seven of the ten best trading days occur within just fifteen days of the ten worst. Sharp rebounds tend to happen in the middle of the most volatile, frightening stretches of a downturn — not after the dust has settled. This is why investors who move to cash during a scary period so often miss the recovery entirely: by the time the news "feels safe" again, the majority of the rebound has already happened.

3. Can professional fund managers actually time the market successfully?

Rarely. According to S&P's SPIVA report, 79% of actively managed large-cap U.S. equity funds underperformed the S&P 500 in 2025, and roughly 92% underperformed over the trailing 20-year period. These are full-time professional managers with research teams and real-time data — and the vast majority still can't consistently beat a simple index fund, let alone time entries and exits around it.

4. Is it a good idea to move to cash during a market downturn?

For most investors, moving entirely to cash during a downturn tends to lock in losses and creates a second, harder decision: knowing when to get back in. Since the market's biggest recovery days often arrive unpredictably and close together, sitting in cash "until things calm down" frequently means missing the exact days that drive most of a portfolio's long-term return.

5. How often should I rebalance my portfolio instead of trying to time the market?

A common, disciplined approach is rebalancing on a fixed schedule — such as twice a year — rather than reacting to market news or emotions. Scheduled rebalancing mechanically nudges a portfolio toward selling assets that have grown and buying ones that have lagged, which tends to support a "buy low, sell high" pattern without requiring anyone to predict market tops or bottoms.

6. How much cash should I keep so I'm not tempted to sell during a downturn?

A common guideline is keeping six to twelve months of living expenses in an accessible, high-yield account. This isn't idle money sitting on the sidelines — it's what allows the rest of a portfolio to stay fully invested through a volatile stretch, since the investor isn't forced to sell stocks at a loss to cover near-term expenses.

7. What is outcome bias in investing?

Outcome bias is the tendency to remember and overweight the one time a risky decision (like selling everything before a downturn) happened to work out, while forgetting or minimizing the times it didn't. This selective memory is a major reason market timing continues to feel like a reasonable strategy to smart, successful people, even though the long-term data consistently shows it destroys wealth for the vast majority of investors.

8. What should I do instead of trying to time the market?

Most of the research points to the same few, unglamorous habits: build an asset allocation you can actually hold through a downturn without panic-selling, rebalance on a set schedule rather than a gut feeling, keep enough cash on hand to avoid being forced to sell at the wrong time, and have a plan — ideally with someone to talk to — before a stressful market day happens, not during it.