Stepping out of the market to avoid the bad days usually means missing the good ones, because they tend to arrive together.
The mistake
Moving to cash to wait for a better moment, or trading often to stay ahead of the news. Both feel like control. Both depend on being right twice: when to get out, and when to get back in.
The evidence
J.P. Morgan Asset Management followed a hypothetical $10,000 invested in the S&P 500 from 2 January 2006 to 31 December 2025. It also found that six of the 10 best days occurred within two weeks of the 10 worst days. (Guide to Retirement 2026)
| $10,000 in the S&P 500, 2006–2025 | Ending value |
|---|---|
| Fully invested | $80,619 |
| Missed the 10 best days | $35,866 |
| Missed the 20 best days | $21,177 |
| Missed the 40 best days | $9,462 |
Missing ten days out of twenty years cut the ending value by more than half. And because the best days cluster around the worst ones, the moment that feels safest to step out is often the moment just before a recovery.
What to do instead
- Set your allocation from your plan, not from a forecast, and write it down.
- Keep near-term cash needs in cash, so a fall in the market never forces you to sell.
- Rebalance by a rule (a date on the calendar, or a band around each target), not by a feeling.
- If you need less risk, change the plan, not your exposure for a few weeks.
- Treat the urge to trade as a prompt to check your reasons. The card below makes that a habit.
The tool: a pre-trade card
Answer these in writing before any trade that isn’t part of a scheduled rebalance.
| Question | Your answer |
|---|---|
| What changed in my goals, timeline or cash needs? (Not in the market.) | |
| What will this trade cost in fees, spreads and taxes? | |
| What risk does it add that I am not paid to take? | |
| Would I make this trade if markets were calm? |
How this is handled in practice
Portfolios are reviewed on a schedule against the plan, not against the headlines. Investment management is offered through Gwynedd Wealth Partners, LLC.
Series · Ten common investor mistakes
- Whose plan are you following?
- Capacity, willingness and requirement: the three sides of risk
- Too concentrated, or too diversified?
- Why popularity makes value harder to judge
- The best days sit next to the worst days
- What you keep, not what you earn
- Do you know your real return?
- Plans fail quietly
- Five checks before you hand anyone your money
- Your savings rate: the lever you control
This article is for education and is not a recommendation to buy or sell any security. The illustration is hypothetical. Index figures do not reflect fees, and you cannot invest directly in an index. Past performance does not guarantee future results. Investment advisory services are offered through Gwynedd Wealth Partners, LLC.