Surprising Impact Missing ONLY the 2 Best Days Has on Returns…And What to Do About it!

Would you be shocked if I told you missing only the 2 best market days each year over 10-years would turn a cumulative +108% return down to only 10%?

Source: Morningstar and ZEGA Financial Calculations S&P 500 Index price only (no dividends)

That’s the effect when analyzing the S&P 500 Index (price only no-dividends) where all days except the two best days were calculated vs all days. The difference is even greater when the study is extended back 20 years.

Here it goes from a cumulative +245% down to a NEGATIVE -15%.

Source: Morningstar and ZEGA Financial Calculations S&P 500 Index price only (no dividends)

So What Is The Solution for Investors Wanting Returns But Want Limited Downside?

Hedged Equity!

Most people know time in the market is more important than timing the market. Yet, investors become fearful, listening to news stories about the impending crash or why now is the time to go to cash. Picking exact market turns is difficult so instead look to remain in the market with downside hedges.

As always reach out to a member of the ZEGA Team to learn more about how hedged equity fits in with your clients’ portfolios.