Updated

Updated · The Motley Fool · Aug 8

Staying Invested Through Bear Markets Lifts $10,000 to $192,000, as Missing 10 Days Cuts It to $85,000

Updated

Updated · The Motley Fool · Aug 8

Staying Invested Through Bear Markets Lifts $10,000 to $192,000, as Missing 10 Days Cuts It to $85,000

Q: Could stepping away during a market crash actually cost you hundreds of thousands of dollars in hidden future gains?

Yes. History shows that stepping away during a crash can destroy a large share of long-term wealth because the market’s strongest rebound days often happen during the most frightening periods. The clearest evidence is Hartford Funds’ S&P 500 example: a $10,000 investment in 1996 grew to more than $192,000 by 2025 if left invested. Missing just the 10 best trading days cut that ending value to a little over $85,000. That gap—more than $100,000 on a modest starting sum—shows how “hidden” future gains can vanish when investors move to cash at the wrong time. The problem is timing. Nearly half of the market’s best one-day gains since 1996 occurred during bear markets, when many investors were likely on the sidelines. Smith+Howard, citing Morningstar data, found that from 1950 to 2020, most of the S&P 500’s 15 worst daily losses were followed by double-digit gains within 12 months. In other words, the market’s worst days have often been close to powerful recoveries. Long-run market history explains why. Bear markets have averaged roughly a 31% to 35% decline and about one year in duration, while bull markets have lasted more than five years on average and delivered much larger cumulative gains. Missing the early phase of a new bull market can therefore be far more costly than enduring the downturn. The practical takeaway is that diversification, disciplined rebalancing, and dollar-cost averaging have generally served investors better than trying to predict exits and re-entries.

3 articles · Updated · The Motley Fool · Aug 8

$10,000 invested in an S&P 500 index fund in 1996 grew to more than $192,000 by 2025 if left untouched, versus just over $85,000 if an investor missed the market’s 10 best days.
Nearly half of those best single-day gains occurred during bear markets, making it hard for market-timers to step out and still catch the rebounds that drive long-term returns.
Morningstar data cited by Smith+Howard showed 14 of the S&P 500’s 15 worst daily drops from 1950 to 2020 were followed by double-digit gains within 12 months; the average one-day loss was 8.8%.
Bear markets still hurt—Stifel says they have cut the S&P 500 by 35% on average since 1932 and arrive about every five years—but the analysis argues diversification and staying invested beat trying to call tops and bottoms.
That matters most at turning points: Hartford says more than one-fourth of the S&P 500’s 50 biggest one-day gains came in the first two months of new bull markets, which have averaged 13.6% in month one and 25% in three months since 1928.