Indices are trending upward following the ceasefire in the Middle East, posting rather spectacular gains. This serves as a timely reminder of an evergreen market lesson: missing out on the best sessions comes at a high price. Without them, performance quickly decouples. It is precisely for this reason that staying invested remains one of the fundamental tenets of finance.

The proof in the numbers

Out of the 50 best sessions for the S&P 500 between 1996 and 2025, 48% took place during a bear market, according to data compiled by Hartford Funds. In other words, nearly half the exceptional sessions occurred while the underlying trend ranged from poor to ultra-bearish. Added to this are the 28% of these top days observed in the first two months of a new bull market (i.e., at the start of a major rebound). Consequently, only a quarter of record gains took place during market phases that could be described as "normal."

Put another way, an initial investment of $10,000 in the S&P 500 between 1996 and 2025 would have grown to $192,167 by remaining fully invested throughout. However, by missing just the 10 best sessions, this final capital would drop to $85,490, or 56% less. Missing the 20 best days would see it fall to $49,551. And by missing the 30 best, only $31,123 would remain, representing an 84% decrease compared to the scenario where the investor remained exposed throughout the period, Hartford details. To reinforce the point, it should be noted that these calculations cover a period that experienced two major financial crises (the bursting of the dot-com bubble in 2000 and the subprime crisis in 2008), or even three if the Covid flash-crash is considered a major crisis.

Over the twenty-year period from 2005 to 2024, the proportions highlighted by Hartford hold true: JPMorgan indicates that the annualized performance of the S&P 500 Total Return reached 10.6%. By removing the 10 best sessions, the annualized performance drops to just 6.4% (and to 3.7% when removing the 20 best trading days). Here again, the conclusion is identical: missing out on sharp rallies seriously harms a portfolio.

Market timing?

This is the ultimate limitation of market timing. In theory, exiting the market before downturns and returning before rallies seems rational. In practice, it is almost mission impossible. The most powerful sessions are concentrated precisely in moments of panic, which is to say, when the majority of investors want to reduce their exposure, not strengthen it.

While the aforementioned data concerns the American market, the situation is identical elsewhere, particularly in Europe.

Here are the best trading days of the last 10 years for the Stoxx Europe 600:
March 24, 2020: +8.4%
March 9, 2022: +4.68%
May 18, 2020: +4.07%
November 9, 2022: +3.98%
April 10, 2025: +3.7%
June 20, 2016: +3.65%
February 25, 2022: +3.32%
October 4, 2022: +3.12%
March 25, 2020: +3.09%
June 29, 2016: +3.09%