If You Miss the 10 Best Days of the Market, What Happens?
Many Malaysian investors think they can "time the market" - sell before crashes, buy back when prices are low. The strategy sounds reasonable on paper. But statistical data from JP Morgan studied over 20 years reveals a shocking truth: if you miss just the 10 most profitable days of the market, your returns can drop by half.
How can just 10 days change your portfolio from millions to half a million? And why does trying to "time the market" actually do more damage than just buying and holding? Let's break down the real data most investors have never seen.
Quick Answer
Based on JP Morgan's study of S&P 500 from 2004-2024: USD10,000 fully invested for 20 years became USD64,844 (10.60% CAGR). But if you missed just the 10 best days, it became roughly USD32,000 (6.37% CAGR) - half the original return. Missing 30 best days = returns drop to 1.53%, almost the same as a savings account. The critical part: 7 of the 10 best days occurred within 15 days of the worst days - meaning investors who panic-sell during crashes almost certainly miss the rebound days.
Why This Question Matters
Every time markets get shaky (Trump tariff war 2025, COVID 2020, European crisis 2011), the first instinct of many investors is to panic sell to "save capital". They plan to re-enter when the market "stabilises". But history shows this strategy almost always ends with worse losses than just holding.
JP Morgan's annual Guide to Retirement has become a classic reference in the investment industry because it uses 20 years of S&P 500 data spanning three major crises (2008 GFC, 2020 COVID crash, 2022 bear market) to show the actual cost of "market timing".
Base Data: USD10,000 in S&P 500 (2004-2024)
Here's the actual simulation from JP Morgan's study:
| Scenario | CAGR | USD10,000 → 20 years |
|---|---|---|
| Stay fully invested | 10.60% | USD64,844 |
| Miss 10 best days | 6.37% | ~USD32,000 |
| Miss 20 best days | 3.69% | ~USD21,000 |
| Miss 30 best days | 1.53% | ~USD13,600 |
| Miss 40 best days | -0.85% | ~USD8,400 (LOSS!) |
| Miss 50 best days | -3.07% | ~USD5,400 (LOSS) |
Notice the speed of losses: - Just 10 days = returns halved - Just 30 days = returns nearly gone - 40+ days = you lose capital
For context: 20 years = approximately 5,040 trading days. Missing 30 of 5,040 days = only 0.6% of your investment time. Yet enough to wipe out 90% of returns.
More Shocking Fact: Best Days Are Right Next to Worst Days
This is the most critical part many investors don't realise:
7 of the 10 best days in the last 20 years occurred within just 15 days of the worst days.
What does this mean? Best days cluster tightly with worst days. Real examples:
- 24 March 2020: S&P 500 rose +9.4% in ONE day - 3 days after COVID market crash
- 13 March 2020: S&P 500 rose +9.3% - within a week of the worst day
- 28 October 2008: S&P 500 rose +10.8% - middle of GFC crisis
- 23 March 2009: S&P 500 rose +7.1% - in GFC recovery phase
The pattern is consistent: strongest rebounds happen when sentiment is worst. Investors who panic-sell on red days automatically miss the next day's rebound because they're already out of the market.
Why Is Market Timing So Hard?
To successfully "time the market", you need to be right TWICE: 1. Sell before the market falls (timing the exit) 2. Buy before the market rises again (timing the entry)
The probability of getting both right is extremely low. Studies by Fidelity Investments show less than 5% of retail investors consistently time the market well over more than 5 years.
Main reasons: 1. Markets move based on unannounced information - if you could predict, you'd be an insider trader 2. News flow doesn't match price movement - bad news can bring rebounds if already priced in 3. Sentiment swings too fast - from panic to euphoria within the same day 4. Cognitive bias - humans tend to overreact on losses (loss aversion)
Even Wall Street professional investors with access to data, AI, and analysts can't consistently time the market.
What Does This Mean for Bursa Malaysia Investors?
Although JP Morgan's data is S&P 500, the same principle applies to Bursa Malaysia. Let's look at examples:
FBM KLCI COVID 2020 Crisis
- 19 March 2020: KLCI closed at 1,219.72 (low point)
- 20 March 2020: KLCI rose +6.5% in ONE day (rebound)
- 23 March 2020: KLCI rose another +3%
Investors who panic-sold on 18-19 March and waited for "recovery confirmation" before re-entering, almost certainly re-entered at higher levels (1,400+ KLCI by May 2020).
Bursa Malaysia 2025 (Trump Tariff War)
In early 2025, when Trump-China tariff tensions peaked, KLCI fell from 1,650 to 1,478 in 6 weeks. But the recovery was within just a few trading days - not several months as predicted.
Investors who sold during the fall and waited for "good sentiment" before buying back, missed: - Rebound +3.2% on 9 April 2025 - Rebound +2.8% on 16 April 2025 - Gradual recovery to 1,580 by June 2025
Time-in-Market vs Timing Strategy
Let's compare with a practical framework:
Strategy 1: Time-in-Market (Buy & Hold)
- Buy quality stocks/ETFs for long term
- Hold even when market falls
- Consistent dollar-cost averaging (DCA)
- Don't panic during crises
- JP Morgan result: 10.60% CAGR
Strategy 2: Active Market Timing
- Try to sell before falls
- Buy back when "prices low"
- Depend on economic news and sentiment
- Constant market monitoring
- Result for most retail: 3-5% CAGR (because of missing best days)
The difference: ~RM45,000 vs RM5,000 in 20-year returns for RM10,000 capital. First strategy wins by a huge margin.
But What About "Buy Low, Sell High"?
The "buy low, sell high" concept is still right - in theory. The problem in practice:
- You don't know what's low until it's passed (only know retrospectively)
- You don't know when to sell high until it's already dropped
- Emotions deceive - "low" feels like "will go lower", "high" feels like "will go higher"
Practical solutions: - Dollar-Cost Averaging (DCA): Buy fixed amount monthly regardless of price - Diversification: Spread capital across 10-20 different companies - Quality stock selection: Pick companies with moats (Public Bank, Petronas Chemicals) - Long time horizon: 10-20 years, not 1-2 years
This strategy aligns with what Peter Lynch teaches in One Up on Wall Street and Psychology of Money by Morgan Housel - emotional discipline is more important than smart timing.
When Should You Actually Sell?
Not all sales are "bad market timing". There are legitimate reasons to sell:
Valid Reasons to Sell
- Company fundamentals broken - excessive debt, bad leadership, lost moat
- You need money for life goals - home down payment, kids' university
- Rebalance portfolio - one stock became >40% of portfolio
- Tax-loss harvesting - sell losers to offset capital gains
- Reduce portfolio risk during retirement - shift from stocks to bonds
BAD Reasons to Sell
- "Market looks like it will fall" (forecasting future)
- "I feel anxious" (emotional reaction)
- "Bad economic news" (already priced in)
- "Mr. A is selling" (herd behavior)
- "I want to buy back when cheaper" (timing the market)
Key difference: valid reasons relate to fundamentals or personal need, not predictions about the market.
Investor Story: What Would Happen If...
Imagine three friends: Ahmad, Bala, and Chong, each invests RM100,000 in KLCI ETF in 2014:
Ahmad (Buy & Hold): - Ignores market news - Reinvests dividends - 2024: Portfolio becomes ~RM180,000 (~6% CAGR, roughly KLCI total return)
Bala (Market Timer): - Sells during 2018 trade war (-15% drop) - Waits for "confirmation" before re-entering (3 months later, +8% higher) - Sells again during COVID March 2020 - Re-enters July 2020 (market already up 35%) - Sells during 2022 bear market - 2024: Portfolio becomes ~RM120,000 (~1.8% CAGR)
Chong (Total Panic): - Sells during COVID March 2020 at the lowest level - Traumatised, just keeps in savings account - 2024: Portfolio ~RM85,000 (real value drop after inflation)
Three people started with the same RM100k. 10-year results: RM180k vs RM120k vs RM85k. Discipline = 2x more profit than panic activity.
FAQ: Common Questions About Market Timing
Q: Is DCA (Dollar Cost Averaging) the same as time in market? A: Almost the same. DCA = buy fixed amount monthly regardless of price. This reduces timing impact because you spread purchases. But you remain invested throughout - never out of the market.
Q: What if I see a clear technical signal? A: Technical signals are usually lagging indicators - they confirm what's already happened. Investors who trust signals typically buy high (bullish signals appear after rises) and sell low (bearish signals appear after falls).
Q: What's the difference between individual stocks and ETFs in market timing? A: Individual stocks are more sensitive to timing - can collapse entirely if a company fails (Enron, Lehman). ETFs are diversified, so volatility is more moderate. But the principle of "missing best days" applies equally.
Q: Does Warren Buffett do market timing? A: No. Buffett is famous for "Time in the market beats timing the market". He's held Coca-Cola since 1988, American Express since 1964. He doesn't time the market - he times the BUSINESS.
Q: If I know a crisis is coming, shouldn't I sell? A: No one "knows" a crisis is coming - they only predict. Many predicted the 2008 crisis as early as 2005, sold early, and missed the 2005-2007 rally. The COVID crisis also wasn't predicted exactly when it would come.
Q: Should I hold all stocks even when fundamentals drop? A: NO. "Time in market" doesn't mean holding junk forever. If a company's fundamentals are genuinely broken (Sapura Energy, Serba Dinamik), sell based on fundamental analysis, not timing.
Q: What percentage of investors outperform the market through timing? A: Statistics show less than 5% of retail investors can consistently outperform through timing. Even professional fund managers, only 20-30% beat the index each year (and often different ones each year).
Q: How does this strategy apply to young and old investors? A: Young investors (20-40 years): can be fully invested in stocks/ETFs. Long time horizon gives them the time-in-market advantage. Older investors (55+): need to rebalance to bonds/cash to reduce volatility because they don't have time to recover from major drawdowns.
How to Apply This in Your Own Portfolio?
Three practical steps you can take today:
1. Set Up Automatic Investment
Instead of deciding every month whether to invest or not, set up auto-debit RM500 per month to your investment account. This removes emotional decision-making.
2. Write Investment Policy Statement
Put in writing: - What percentage of portfolio in stocks vs bonds vs cash - When MUST rebalance (e.g., when one asset class >50% or <20%) - When you can sell stocks (fundamental criteria) - When you CAN'T sell (panic during market falls)
3. Stop Watching Daily News
Daily financial news is noise, not signal. Long-term investors should check portfolio: - Every month: Track total value - Every quarter: Review allocation - Every year: Major rebalance if needed
Reduce check frequency = reduce panic selling. Aligns with recommended investor daily routine - not staring at screens all day.
Conclusion
JP Morgan's data shows missing just the 10 best market days over 20 years can wipe out half your returns. Missing 30 days = returns drop to savings account levels. More critically, 7 of the 10 best days occur within 15 days of the worst days - meaning investors who panic-sell during crises almost certainly miss decisive rebounds. Time-in-market beats timing-the-market in nearly every academic and industry study.
For investors who want to start a time-in-market strategy with DCA discipline and diversification, the first step is opening an account that allows long-term investment in various companies.
Open a CDS account to start investing in Bursa Malaysia as well as foreign stocks like US and Hong Kong - allowing you to access global markets for diversification and stay invested long-term.
For long-term investing fundamentals before you start, download our Stock Investing Basics Ebook for free.