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Feeling nervous about Monday's stock market drop and considering a move to cash until you think the worst is past? Think twice.
While it's impossible to predict what stocks will do next, various research shows that missing out on the best-performing days in the market — regardless of when the bad days are — can wreak havoc on your long-term returns. And the easiest way to miss those gains is by fleeing the market after you're spooked by a downturn.
The chart below shows how $10,000 invested in the S&P 500 index, for the 20-year period of 1999 through 2018, would have performed under various scenarios.
If the $10,000 remained fully invested, it would have grown to $29,845 with an average annual return of 5.6%.
In comparison, missing out on just the best 10 days in that time period would have reduced the growth of the initial investment by more than half: After 20 years, that $10,000 would be just $14,895 with a 2% average yearly return.
And if the best 20 or more days were missed, the returns over that 20-year period are in the red.
Even if you think you'll just wait it out for a few weeks to see what happens, be aware that 6 of the S&P's 10 best-performing days during the 20-year period occurred within two weeks of the 10 worst days, according to J.P. Morgan.
For example, the worst single day in 2015 — Aug. 24, when the S&P dropped nearly 4% into correction territory — was followed two days later by the year's best day of returns (again, nearly 4%).
Of course, in theory, you could also miss the worst days if you get out of the market. Yet because many investors tend to panic and sell after prices already have dropped, experts typically recommend staying invested so you don't miss out on the upside.
While the S&P has been sliding since July 26 when it closed at a high of 3,025.86 — it shed nearly 3% on Monday alone — the index remains in positive territory so far in 2019. Year to date through Monday's market close of 2,844.74, its return is about 13.5%.
— CNBC's John Schoen contributed to this report.