Answer extracted from the Money Guy Show podcast — listen to the full episode below.
What is the impact of missing the best years in the stock market on long-term investment returns?
If you invested $10,000 in the S&P 500 from 1987 to 2025, it would have grown to $616,000. But if you missed just the best five consecutive years, that same $10,000 would have turned into only $175,000. Missing a handful of peak trading days can slash your returns by nearly two-thirds.
This dramatic difference reveals a fundamental truth about wealth building: staying in the market matters far more than trying to predict when to buy or sell. The market's biggest gains often come unexpectedly, clustered around moments of uncertainty or market downturns—precisely when panic selling is most tempting.
The data comes from Brian Preston's analysis in the Money Guy Show, which examines how the wealthiest Americans actually build and preserve their fortunes. Preston, a Certified Financial Planner, has found that consistent market participation, rather than market timing, is the cornerstone of long-term wealth creation.
"Time in the market is way more viable than timing the market."
Brian Preston — Certified Financial Planner at Abound Wealth Management. Preston specializes in advising high-net-worth individuals and families on wealth preservation and growth strategies, drawing on decades of financial planning expertise and rigorous data analysis from sources like the Federal Reserve's Survey of Consumer Finances.
The trap of trying to time the market is particularly dangerous for new investors. As explored in this episode, even missing five of the best-performing years out of a 38-year period—just 0.4% of all trading days—reduces returns by 71%. And the best days almost never come in isolation; they cluster around volatile market periods when most investors are selling, not buying.
The practical implication: a disciplined, consistent approach to investing beats any attempt to outsmart market cycles. This is why wealthy Americans rely heavily on retirement accounts and diversified equity holdings—not because they have perfect market timing, but because they stay invested through all market conditions.
For a deeper dive into how the wealthiest 10% actually allocate their assets and why equity ownership is their primary wealth-building tool, listen to the full episode on Listenly.
See also
How does the equity ownership rate differ between typical Americans and the wealthiest 10%?
58% of all Americans own equities, probably mostly in retirement plans like their 401k, but if you compare that to the top 10%, 96% of the wealthiest own equities in various forms.
What net worth threshold defines membership in the top 10% of wealth in the United States according to Federal Reserve data?
According to the Federal Reserve, if you want to be in the top 10% of wealth in the country, you need to have a total net worth of about $1.9 million.
What is the risk of making money on risky or speculative investments as a new investor?
The absolute worst thing a new investor can do is get lucky on their first time by making money on a bad idea or risky endeavor, because it creates a false sense of confidence that leads to bigger losses later.