Most financial advisors mean well. They try to show you graphics that tell the story they want you to hear. There’s a big problem. That story often gets oversimplified to the point of being wrong – at best, it’s misleading.
This is the worst chart every financial advisor will show you.
If you’ve worked with a financial advisor before, you’ve seen it. If you’ve been pitched by a financial advisor, you’ve seen it. Every advisory firm I have worked for used this slide.
You’ll see this chart from large asset managers, like these examples from Hartford Funds, Putnam, Fidelity. You’ll see it from brokerages like Edward Jones or Merrill Lynch. You’ll see it from most wealth management firms (way too many to link to).
The chart shows what happens to your investment returns if you miss the best X days in the market. The slide is so ubiquitous that my primary investment data source comes preloaded with a template that will produce the slide for advisors.
I ran the analysis from 1/1/2000 to 1/31/2025. Here’s what the chart looks like.
I wish this chart would disappear. It won’t. It tells too good a story. If only that story were true.
This chart is disingenuous. Using the same logic and data, you can reach the opposite conclusion.
Let’s invert it.
What happens to your investment returns if you miss the worst X days in the market? Well, something pretty amazing happens. They get way better.
An advisor would never show you a chart that tells you what happens if you miss the worst days. That one doesn’t tell the story your advisor wants you to hear.
Missing the 50 worst days in the market means you have almost 7x more money at the end of the analysis period. Why isn’t every advisor sharing that chart? Because it’s just as dishonest
The worst days are more destructive than the best days are constructive.
A big percentage down day requires an even bigger percentage move up to compensate for it. If the market drops 25%, it needs to go up 33% just to get back to breakeven. On the stock market’s best day in the last 25 years, the S&P 500 was up 11.58%. It’s worst day was -11.89%. Even though they are very similar percentages, if those days happen back-to-back, you finish -1.7%. The best doesn’t fully offset the worst.
The best of times are the worst of times
The best days and the worst days are almost always very close to each other. Very good days and very bad days cluster during times of extreme volatility. If we look at the last 30 years, we’re talking about the dotcom crash, the Great Financial Crisis, and COVID. Of the 10 best days everyone worries about you missing, all 10 were during the Great Financial Crisis or the market crash in the early days of COVID. Of the 10 worst days in the stock market, nine of them were in (you guessed it) those same two periods.
Here’s a fun period. March 12-18, 2020. The world realized that COVID is a much bigger deal than anyone thought and the market melted. This 8-day period had 5 of the worst days since 2000 in it. It also had 3 of the best days.
You can’t miss the best days unless you also miss the worst days.
The chart your financial advisor should show you instead
Instead of telling you half the story, your financial advisor should get to the heart of the issue. If you are a long-term investor, the question you should ask is “Is now a good time to buy stocks?” That is a good question. It doesn’t matter nearly as much as you think.
This chart does a much better job of laying it out. Everyone is afraid they will buy stocks at the absolute top of the market. They’d rather buy low (wouldn’t we all). However, for long-term investors, it doesn’t have as big an impact as you would think.
Schwab studied what would have happened if you were to invest $2,000/year for 20 years ($40,000 total invested) and had one of 4 scenarios play out
You invest the entire $2,000 on Jan 1
You have great luck and always invest your $2,000 at the lowest price of the year
You have horrible luck and always invest your $2,000 at the highest price of the year
You get so worried about getting the best price that you never invest and leave your money in treasury bills.
You learn that getting and keeping your money in the market is the most critical driver of long-term investment growth. This chart is far more honest and makes the same point as missing the dishonest scare tactics about missing the 10 best days in the market.
Kevin Shuller is the Founder/CIO of Cedar Peak Wealth Advisors. This post is for informational purposes only and is not intended as financial advice.