In support of this claim, a study by Birinyi Associates points out how a buy-and-hold investor who put $1 into the S&P 500 in January, 1966 would have earned more than $16 today, but if they missed just the five best days of each year, their return would have been a mere 11 cents.
A new book, Juggling Dynamite, written by portfolio manager Danielle Park, takes issue with that point of view. As part of her counterargument she cites an interesting study by Crestmont Research that looks at returns if an investor missed the 10 worse days in given years. On that basis, the S&P 500 would have gained 5.9% instead of losing 24.2% in 2002. In 2003, the return from missing the 10 worse days would have been 59% versus the 26.4% rise in the S&P 500.