S&P 500 (without Dividends) Daily Returns in decreasing Order - Last 10 Years 4/1/1996 - 3/30/2006
             
  S&P 500 Daily Total Annualized    
Date Close Return Return Return    
      98.90% 7.12%   Return for 10 Year Period
1 7/24/2002 843.43 5.73% 88.12% 6.52%   After Return for 07/24/2002 is removed
2 7/29/2002 898.96 5.41% 78.46% 5.96%   After Return for 07/29/2002 is also removed
3 10/28/1997 921.85 5.12% 69.78% 5.44%   After Return for 10/28/1997 is also removed
4 9/8/1998 1023.46 5.09% 61.56% 4.91%   After Return for 09/08/1998 is also removed
5 1/3/2001 1347.56 5.01% 53.85% 4.40%   After Return for 01/03/2001 is also removed
6 3/16/2000 1458.47 4.76% 46.85% 3.92%   After Return for 03/16/2000 is also removed
7 10/15/2002 881.27 4.73% 40.22% 3.44%   After Return for 10/15/2002 is also removed
8 4/5/2001 1151.44 4.37% 34.35% 3.00%   After Return for 04/05/2001 is also removed
9 10/15/1998 1047.49 4.17% 28.97% 2.58%   After Return for 10/15/1998 is also removed
10 8/14/2002 919.62 4.00% 24.00% 2.17%   After Return for 08/14/2002 is also removed
11 10/1/2002 847.91 4.00% 19.23% 1.77%   After Return for 10/01/2002 is also removed
12 10/11/2002 835.32 3.91% 14.75% 1.39%   After Return for 10/11/2002 is also removed
13 9/24/2001 1003.45 3.90% 10.44% 1.00%   After Return for 09/24/2001 is also removed
14 12/5/2000 1376.54 3.89% 6.30% 0.61%   After Return for 12/05/2000 is also removed
15 4/18/2001 1238.16 3.89% 2.32% 0.23%   After Return for 04/18/2001 is also removed
16 9/1/1998 994.26 3.86% -1.48% -0.15%   After Return for 09/01/1998 is also removed
17 5/8/2002 1088.85 3.75% -5.04% -0.52%   After Return for 05/08/2002 is also removed
18 7/5/2002 989.03 3.67% -8.41% -0.87%   After Return for 07/05/2002 is also removed
19 3/17/2003 862.79 3.54% -11.54% -1.22%   After Return for 03/17/2003 is also removed
20 9/23/1998 1066.09 3.54% -14.57% -1.56%   After Return for 09/23/1998 is also removed
21 10/28/1999 1342.44 3.53% -17.48% -1.90%   After Return for 10/28/1999 is also removed
22 10/10/2002 803.92 3.50% -20.26% -2.24%   After Return for 10/10/2002 is also removed
23 10/19/2000 1388.76 3.47% -22.94% -2.57%   After Return for 10/19/2000 is also removed
24 3/13/2003 831.9 3.45% -25.51% -2.90%   After Return for 03/13/2003 is also removed
25 10/13/2000 1374.17 3.34% -27.92% -3.22%   After Return for 10/13/2000 is also removed

 

You are looking at the top daily returns on the S&P 500 (without dividends) for the past ten years. Removing the best returns one by one will show you the impact on performance.  The point being made is that being out of the market just a few days in the past ten years could have made a huge difference in your overall return hence the need to stay invested for the long term and not attempt to time the market. Of course, the odds of being out of the market on only those days is extremely small, however note that several of these best days occurred within a few months of each other and if you had decided to cash out and stay on the sidelines for a few months, you might have missed more than just one best day and your overall return would have been seriously affected.  There is one fallacy here, which is that obviously if you are out of the market for a few months, you might miss a few bad days too and that would help even things out. True, but remember that the stock market has an upward bias and the point made here still stands.  Staying invested for the long term is the only way to reap the rewards available with stock investments unless one is extremely lucky. As you can see, just a few key days can make the difference between a good or a bad investment.

Data was obtained from sources believed to be reliable but accuracy cannot be guaranteed.