Staying invested through downturns

Why missing the market's best days is so costly, why the best days cluster near the worst, and practical ways to stay invested when markets fall.

The cost of stepping aside

A handful of days produce a large share of the stock market's long-run gains. Studies from J.P. Morgan and others show that over roughly 20 years, missing just the 10 best days of the S&P 500 has cut the ending value by about half.

The best days hide near the worst

Most of the market's biggest up days happen during bear markets or within weeks of the biggest down days, such as late 2008 and March 2020. Selling after a fall usually means missing the rebound.

Staying on offense

  • Keep investing on schedule during falls. You buy more shares at lower prices. See Dollar-cost averaging vs lump sum.
  • Hold enough cash outside the market that you are never forced to sell.
  • Write your plan in calm times, including what you will do after a 20% and a 35% fall.
  • Size risk to what you can hold. A leveraged strategy you abandon at the bottom is worse than a plain one you keep. See Maximum drawdown.
  • Use fear as information. A very high The VIX (volatility index) has historically been a better time to buy than to sell.

Not the same as never selling

Selling a company because its business changed is good investing. Selling everything because prices fell is market timing.

See also

  • Dollar-cost averaging vs lump sum Dollar-cost averaging compared with investing a lump sum at once: what the historical evidence shows, and when spreading purchases out still makes sense.
  • Hype and market sentiment How hype, headlines and crowd emotion move stock prices away from fundamentals, and simple habits that keep your decisions grounded in the business.
  • The VIX (volatility index) What the VIX fear index measures, how it is calculated from S&P 500 options, what VIX levels mean, its history of spikes, and why it tends to mean-revert.
  • Maximum drawdown What maximum drawdown is, how to calculate it, why losses need bigger gains to recover, and historical drawdowns for stocks and leveraged funds.

Pages that link here: A long-term investing philosophy, Investing FAQ

Last updated September 30, 2026. Education only, not investment advice.