Money in 10: the numbers that prove boring investing wins

The most expensive mistake in investing is trying to be clever. Miss the stock market's 10 best days over the last 20 years and you would have given up more than half your gains, according to JPMorgan Asset Management research, and most of those best days landed right next to the worst ones. Here are 10 numbers that prove the boring, steady way keeps beating the exciting way.

Send this to anyone who has ever panic-sold, or bragged about timing the market.

1. Miss 10 days, lose half

Out of roughly 5,000 trading days in 20 years, missing just the 10 best ones cuts your return by more than half. The market rewards showing up, not guessing right.

2. The trap hiding inside number one

Most of the market's best days happen within two weeks of its worst days, according to J.P. Morgan Asset Management. So the people who panic-sell in a crash usually miss the rebound that follows. Doing nothing is a strategy.

Send this to the friend who sold everything in the last dip.

3. Waiting 10 years can cost you $280,000

Invest $200 a month starting at 25 and you could have about $525,000 by 65. Start the exact same plan at 35 and it is about $244,000. Ten years of waiting, more than a quarter million dollars. See The Real Cost of Waiting to Invest.

4. The 10-second math trick

Want to know how fast your money doubles? Divide 72 by your return. At 7% a year, money doubles about every decade, with zero extra effort from you. That is compounding doing the work, see How Compound Interest Works (and Why It Matters).

5. $5 a day becomes $185,000

Skip nothing, just redirect five dollars a day into investing. Over 30 years at a 7% average return, that is roughly $185,000. The amount feels small. The result does not.

6. Cash quietly loses

A dollar from 20 years ago buys about 60 cents of goods today, according to U.S. Bureau of Labor Statistics inflation data. "Safe" money sitting in cash slowly melts. Investing is how you keep up with the cost of living, not just beat it.

7. The odds are quietly on your side

Since 1928, the US stock market has finished up in about 3 out of every 4 years. The headlines scream about the down years. The math quietly favors the patient.

8. The 20-year streak nobody talks about

Pick any 20-year stretch in modern US market history and a diversified investor who stayed in came out ahead. Not most stretches. Every one. Time turns volatility into a footnote.

9. The boring engine behind the returns

Since 1960, about 84% of the S&P 500's total return has come from reinvested dividends and the compounding they unlock, according to Hartford Funds. Not stock-picking. Just reinvesting the payouts and waiting.

10. The number that explains all the others

Over the last decade, the average fund investor earned about 1.1 percentage points less per year than the very funds they owned, giving up roughly 15% of their potential returns, according to Morningstar. The gap is not the market. It is us, buying high when it feels exciting and selling low when it feels scary. Boring investing wins because it removes the one variable that keeps losing: our own timing.

Send this to someone who is doing the right thing already. Then keep going.

Bottom line

Exciting investing makes a better story. Boring investing makes more money. Show up, spread it out, leave it alone, and let time do the heavy lifting.

Sources

• Items 1 and 2 (missing the best days, and the best days clustering near the worst): J.P. Morgan Asset Management, Guide to the Markets, based on the S&P 500 over the 20 years ending December 2022.

• Items 3 and 5 (the cost of waiting, and $5 a day): hypothetical illustrations by Stash, assuming a 7% average annual return compounded monthly. Illustrations only, not predictions.

• Item 4 (the Rule of 72): a standard mathematical approximation.

• Item 6 (cash and inflation): U.S. Bureau of Labor Statistics, Consumer Price Index.

• Items 7 and 8 (positive years and the 20-year record): S&P 500 historical calendar-year and rolling 20-year total returns since 1928 (NYU Stern dataset).

• Item 9 (dividends and compounding): Hartford Funds, "The Power of Dividends: Past, Present, and Future," based on the S&P 500 since 1960.

• Item 10 (the investor return gap): Morningstar, "Mind the Gap" 2024.

Important disclosures

This article is for educational purposes only and is not a recommendation to buy, sell, or hold any security. Hypothetical examples are for illustration only, assume a fixed average annual return that real markets do not deliver, and do not reflect fees or taxes. Investing involves risk, including the possible loss of principal. Past performance is not a guarantee of future results. Stash is a registered investment adviser; what is right for you depends on your specific situation.

• Educational only and does not constitute investment, legal, accounting, or tax advice. See full disclosures at www.stash.com/disclosures.