--- title: Making heads or tails of tails description: "\"Stay in the market for a long period of time, and good things will happen... if you miss the best days, your overall return will be dramatically lower.\"" image: https://www.covisum.com/hubfs/MissBest14-1.png --- [Login](https://www.covisum.com/login-experience) | [Call: 402-235-4500](tel:1-402-235-4500) | [Contact Us](https://www.covisum.com/contact) ** [![covisum-logo](https://www.covisum.com/hs-fs/hubfs/covisum-logo.png?width=264&height=41&name=covisum-logo.png "covisum-logo")](https://www.covisum.com/) [![Start Your Free Trial](https://no-cache.hubspot.com/cta/default/2755909/b23743cd-d0df-4907-a66d-293b58ab1164.png)](https://cta-redirect.hubspot.com/cta/redirect/2755909/b23743cd-d0df-4907-a66d-293b58ab1164) [![Contact Us](https://no-cache.hubspot.com/cta/default/2755909/6c6d7fe7-e094-4fc0-9c82-d93d4ccbb532.png)](https://cta-redirect.hubspot.com/cta/redirect/2755909/6c6d7fe7-e094-4fc0-9c82-d93d4ccbb532) # Making heads or tails of tails [RISK  |  ](https://www.covisum.com/blog/topic/risk)8/15/17 6:49 AM  |  by [Katie Godbout, Vice President of Sales & Marketing](https://www.covisum.com/blog/author/katie-godbout-vice-president-of-sales-marketing) By [Ron Piccinini, Ph.D.](https://www.covisum.com/our-team/), Director of Product Development ### An investment’s failure or success is impacted by the worst and best trading days — more than you might imagine. Understand the true value of “tails.” ![WEB_Covisum_heads-or-tails.png](https://www.covisum.com/hs-fs/hubfs/Web%20and%20Social%20Media%20Graphics/WEB_Covisum_heads-or-tails.png?width=448&name=WEB_Covisum_heads-or-tails.png)Investors know that time in the market is their friend. Stay in the market for a long period of time, and good things will happen, even in times of high volatility. A supporting statistic is often presented: if you miss the best days, your overall return will be dramatically lower. For instance, between Jan. 3, 2006, and Dec. 30, 2016, a buy-and-hold strategy in the S&P500 would have turned a $100 investment into $206. If you missed the best 0.5% of days (in this case, the best 14 days), the $100 investment would have *lost* money, and become $86. See chart below: ![MissBest14-1.png](https://www.covisum.com/hs-fs/hubfs/MissBest14-1.png?width=706&height=636&name=MissBest14-1.png) But what would happen if we were to miss the *worst* 0.5% of days? The $100 investment would turn into a whopping $523. The chart below illustrates this point: ![MissWorst14.png](https://www.covisum.com/hs-fs/hubfs/Web%20and%20Social%20Media%20Graphics/MissWorst14.png?width=706&height=636&name=MissWorst14.png) The S&P500 is hardly an anomaly. We see the same pattern with different investments. For example: | **$100 investment in:** | **Buy-and-hold** | **Miss Best Days** | **Miss Worst Days** | | --- | --- | --- | --- | | SPY | $206 | $86 | $523 | | AGG | $148 | $116 | $191 | | GIS | $279 | $144 | $557 | | AAPL | $1,298 | $370 | $4,799 | **Conclusions:** - The impact of the worst and best 0.5% of trading days (a.k.a. “the tails”) have a very significant impact on success or failure of an investment - Avoiding the worst days is in many cases dramatically more impactful than catching the best days - If the cost of hedging the worst 0.5% days of the S&P500 costed an average of 500bps per year, would it be worth it? Help your clients see this in their protfolios. Sign up for SmartRisk today! 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