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In the realm of investing, a common misconception persists among many individual investors. They believe that by actively timing their trades—buying low and selling high—they can reap substantial profits. However, empirical data suggests a different reality. As many seasoned investors know, missing just a handful of the best trading days can dramatically alter one’s investment returns.

Consider that in some of the strongest bull markets, it may take only being absent from 1% to 2% of the best trading days to wipe out all gains. This startling fact unveils the primary challenge facing speculators: accurately predicting daily market movements. History overwhelmingly favors those who hold their investments long-term rather than those who attempt to exploit short-term volatility.

Howard Marks, a renowned value investor, succinctly emphasizes this point with his poignant remark: “The time you hold a stock is more important than the time you pick to buy or sell.” Marks' wisdom reflects a fundamental principle in investing: rather than frantically trying to time entry and exit points, a steadfast hold on quality assets over time cultivates growth.

Unfortunately, many speculators find themselves caught in a detrimental cycle. They often believe they can navigate the market's ups and downs by choosing only the optimal trading days while avoiding downturns. Yet, this approach rarely results in the fortune they seek. Even the infamous Jesse Livermore, once one of the most celebrated stock traders, ultimately lost the majority of his wealth, ending his life under tragic circumstances. Even though some argue his death was tied to personal issues rather than investment failures, it still underscores the inherent risks involved in a speculative approach to investing.

The notion that one can skillfully time the market is a siren song, seductive yet potentially disastrous. To illustrate this peril, we can turn to some compelling data comparing major stock market indices over time. By segmenting the market into periods of five years each, we can explore just how detrimental it can be to miss a small fraction of the best-performing trading days.

To provide a clear picture, let’s look at three widely recognized indices: the CSI 300 Index, which reflects large-cap stocks in China; the ChiNext Index, known for small enterprises; and the S&P 500 Index, representing the broader U.S. market. Analysis of these indices reveals a common thread: in any bull market, simply missing a handful of the best trading days can severely inhibit long-term investment returns.

Starting with the CSI 300 from 2005 to 2024, we observe that only the latest five-year segment (2021-2024) yielded a negative return, while each preceding segment exhibited substantial gains. For instance, from 2005 to 2010, investors saw the index rise by 213%. However, had one missed just 19 of the most profitable trading days—representing a mere 1.3% of the total trading days within that timeframe—the result would have been a drop in returns by an astonishing 226%, leading to a net negative return.

In the subsequent periods of 2011-2015 and 2016-2020, again, the impact of missing even just a few key trading days was omnipresent. During both five-year durations, yielding returns of 19% and 40% respectively, missing 3 or 8 significant trading days would dissolve these profits, resulting in negative overall returns despite positive market conditions.

Could it be an anomaly related to the blue-chip nature of the CSI 300? A closer examination of the ChiNext Index reveals a similar pattern among smaller companies as well. From 2010 to 2024, during a notable bull market where the index rose by 171% over 1356 trading days, missing just 18 days—again about 1.33%—would cost an investor a staggering 180% of potential returns, tipping overall returns into negative territory.

History repeats itself in the venerable S&P 500 Index, which has weathered nearly a century of market fluctuations. Analyzing its performance from 1928 to 2024, one can discern similar trends. Of the 20 segmented five-year periods, only four have boasted returns exceeding 80%—a striking 20% success rate. The bull markets within this period occurred during 1951-1955, 1991-1995, 1996-2000, and 2016-2020, yielding 123%, 87%, 114%, and 84% returns respectively. Alarmingly, missing just a handful of the strongest trading days—ranging from 0.87% to 4.15% of trading days—could mean the difference between achieving these impressive returns and walking away with nothing.

Thus, the data starkly outlines the challenges for speculators in the stock market. To attempt profit through diligent timing is fraught with risk. Missing 1% to 2% of the best trading days can obliterate any gains, especially in weaker market conditions. The reality is that accurately forecasting daily fluctuations is immensely difficult, and even more so in a market driven by a myriad of unpredictable factors over thousands of trading days.

History illustrates that the true long-term winners in the investment arena are value investors. Their strategy of focusing on solid, underappreciated assets rather than attempting to outsmart the market temporalities has proven to yield superior returns over time. Unlike speculators, who often cling to otherworldly expectations, the disciplined and patient value investors have seen their long-term strategies pay off handsomely.

Ultimately, the question remains: why not embrace a superior investment methodology that tilts the odds in one's favor? Instead of risking capital on shifting market sands, the rational approach is to seek reliable, long-term returns through value investing. After all, investing should be an endeavor marked by thoughtful strategy and sustainability, not reckless speculation.