Jeff Sommers' recent article in the The New York Times offered some sobering, insightful stats on investing - and why most people are bad at it.
One reason comes down to when the best returns are historically captured:
Every one of the top 10 days of the last five decades occurred soon after - and often right in the middle of - a terrible stock market decline
For example, when was the best day in the U.S. stock market in the last 16 years?
- This past April 9th, when the U.S. stock market rose nearly 10% - a magnificent gain that most overlook because it occurred in the middle of the wild stock swings caused by Trump's erratic tariff announcements.
- April 9, as it turns out, ranked third among all of the best one-day returns in the U.S. market over the last 50 years.
- Of the 10 best days in the last 50 years, 5 occurred during the great financial crisis of 2008 and 2009.
- 3 of those 5 occurred while the stock market was mired in a recession. If you had bought stocks right after those surges you would have had to bear heavy losses.
- 2 of the most glorious days for stock investors in the last 50 years occurred in the depths of the 2008 downturn.
- The single best day in half a century was on Oct. 13, 2008, when the U.S. stock market gained 11.4%. The market went nowhere for a while, and then, on Oct. 28, it rose 9.8%, in the second-best return in 50 years.
