The Best of Days, The Worst of Times

April 21, 2023

“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair.”

                                                                                                                                           Charles Dickens, A Tale of Two Cities              

Perhaps the most elegant words written on the paradox of the human experience. The dichotomous coexistence of good and bad. The inescapable dissonance of humanity.                                                                             

Anyway, here is a startling graph. It measures the impact of missing the best days in the market. We will call this Graph #1:[i]

It is one of the more shocking graphs I’ve seen. $10,000 invested in the S&P 500 index in the beginning of 1993 grew to $158,434 over 30 years (note that includes the 2022 bear market drawdown). There are 252 trading days in a year, so this 30-year period has 7,560 days the market is open. Remarkably, if you miss the 10 best days – 0.13% of all trading days – your total return is cut in half (and then some). Miss 0.26% of those trading days (20 days) and your wealth decreases by 73% - from $158,434 to $42,601. That works out to just a 4.95% annualized return. You could have just stuck your money in bonds and avoided all the nasty volatility! Staggering.

This has severe implications for anyone considering getting out of the stock market, even for a short period of time. The downside of that decision is possibly quite high. And it is not easily identified. If you sell and miss a good day or two, you won’t notice the difference unless you run the numbers years later – your actual returns vs your portfolio’s returns had it been fully invested. No one actually does that. They look up 30 years later and wonder why they haven’t made as much money in the stock market as they expected.

So the impact of missing the market’s best days is formidable. Which leads us to a follow up question… when do those best days occur?

We have definitive data on the Dow Jones Industrial Average going back to 1926. Since then, here are the 20 best days in stock market history. We will call this Chart #1:[ii]

Two observations jump out immediately. First, there are only a few years represented here. Second, they were all terrible years historically:

1929, 1931, 1932, l933: Great Depression

1939: End of the Great Depression but seems to be a bit of an outlier. We’ll get back to this…

1987: Black Monday Crash

2008: Great Recession

2020: COVID Crash

Each of the market’s 20 best days happened during horrible years when sentiment was in the trash can. I’m writing this in 2023 in the midst of the bear market drawdown that began in 2022. Sentiment is currently in the trash can. But trust me – sentiment was buried even deeper during the Great Depression, the Great Recession, Black Monday, and the COVID crash. Yet that is where all the best days in market history occurred (we’ll get back to that date in 1939). And you saw what happens if you miss just a few of the market’s best days! Your long-term portfolio returns end up in the same place as short-term sentiment: the trash can. See Graph #1.

We are far removed from the Great Depression – very few people living today were alive then. History paints a grim picture. Unemployment was 25%[iii] (context: 10+% unemployment is a nightmare). 25% is unthinkable. The stock market endured an 89% drawdown.[iv] Again, unthinkable.

And yet!

13 of the Dow’s 20 best days ever occurred in the doldrums of the Depression. History remembers October 29, 1929 as Black Tuesday – the Dow fell 12% in one of the worst days on record.[v] No one mentions the following day – October 30th – was the 3rd best day in stock market history: +12.34%. The best of days, the worst of times.

It was 58 years before the marked notched another day poor enough to earn the “black” moniker. October 19, 1987 is dubbed “Black Monday” – the Dow lost 22% in a single day.[vi] 22! In one day! The worst trading day on record.

And yet!

Two days later – October 21st – the Dow recorded its 8th best day on record. +10.15%. The best of days, the worst of times.

Most reading this lived through the Great Recession. The Dow Jones peaked in October of 2007 and began a 17-month march to a 54% decline.[vii] The worst stock market decline since the dreaded Great Depression. Very few people living had ever seen anything like it. 10% unemployment.[viii] Giant banks failing. Global credit crisis.

And yet!

One year into the drawdown the Dow notched the 6th and 7th best days on record. +11.08% and +10.88%, respectively. The best of days, the worst of times.

The COVID crash is recent memory. The fastest 30+% drawdown in history took place in a mere 22 trading days during February and March of 2020, finally breaking the Great Depression’s near century-old record.[ix]

And yet!

You have probably already referred back to Chart #1. Yep. The 11th best day in market history occurred during that decline on March 13th: +9.36%. The market bottomed on March 23rd, so of course March 24th was the 4th best day on record: +11.37%. Two weeks later – April 6th – the Dow added the 19th best day ever: +7.73%. The best of days, the worst of times.

Here is a handy model for successful investing in the stock market:

  • Don’t miss the best days. The best days have a massive impact on long-term wealth creation. See Graph #1.

  • Historically the best days happen during crises when the news is all bad and everyone feels horrible about their investment accounts. See Chart #1.


  • If you find the news to be all bad and you are worried about your investment account…

  • Well this blog isn’t investment advice. You can decide what to do.

Now, that seeming outlier: September 5, 1939. The 20th best day in Dow Jones history. Yes, it was the tail end of the Great Depression. The stock market's worst drawdowns were earlier in the 30’s though. Given the pattern discussed above, one wonders whether something bad happened around September 5th. Or have we finally found an outlier? A huge positive day (+7.26%) in the stock market when the news wasn’t all negative?

*Searches the historical records*

All looked quiet on September 4th.

The market was closed on September 2nd and 3rd for the weekend.

Ah yes.

September 1, 1939.

The day Hitler invaded Poland. The beginning of World War II.

The best of days, the worst of times.

Sean Cawley CFP®


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Content here is for illustrative and educational purposes only. It is not legal, tax, or individualized financial advice; nor is it a recommendation to buy, sell, or hold any specific security, or engage in any specific trading strategy. Results will vary. Past performance is no indication of future results or success. Market conditions change continuously.

This commentary reflects the personal opinions, viewpoints, and analyses of Resolute Wealth Management. It does not necessarily represent those of RFG Advisory, clients, or employees. This commentary should be regarded as a description of advisory services provided by Resolute Wealth Management or RFG Advisory, or performance returns of any client. The views reflected in the commentary are subject to change at any time without notice.







[vii] YCharts, DJI Level, 10/09/2007 – 03/09/2009