With markets gyrating wildly in 2025, a familiar warning has made a comeback: don’t try to time the markets, because data shows that if you miss the 10 best days, your portfolio is doomed.
Billionaire money manager Cliff Asness isn’t buying it, bluntly saying such thinking is “very dumb”.
Yes, missing the best days hurts, says Asness. But missing the worst days helps just as much. The effect is symmetrical. Yet, for some reason, only one side gets a chart.
In a 1999 paper, Asness also ran the numbers on missing the best and worst months: from 1970 to 1996, miss the 12 best months and your annual return drops from 12.3 per cent to 7.2 per cent. Omit the 12 worst months instead? Your return jumps to 18.1 per cent. The pattern holds in later decades, on monthly and daily data.
Does this mean you should time the market? No. Asness is still firmly in the ‘don’t try this at home’ camp, saying most people – including himself – “suck” at it. Timing is hard, expensive and usually ends badly. His point is just that the standard scare-story – miss a few good days, lose everything – is unserious.
If you’re going to dissuade people from market timing, he suggests, try honesty. The truth is bad enough, rather than resorting to this “terrible, silly, embarrassing argument”.
