Keeping Perspective Amid Market Madness and Tax Year-End Noise
On Monday morning, after a weekend of headlines and a terrible night in Asian markets, the FTSE 100 was down nearly 3% …
Then Donald Trump opened his mouth. And so, before we even reached lunchtime, the market had turned positive for the day, and spent the rest of the afternoon acting as if nothing had happened:
Source: FactSet/7IM. Past performance is not a guide to the future
Two weeks ago, something similar happened in South Korea. On 4th March 2026, the South Korean stock market fell 12%, the worst day in the last twenty years. On 5th March 2026, the same market rose 10%, the second best day in the last twenty years.
These sharp swings are a great real-time reminder of the lessons behind one of the most helpful charts – often really useful (with a bit of context) in talks with worried clients.
Source: FactSet/7IM. Past performance is not a guide to the future.
You’ve probably seen it before, but the story is simple:
Markets mostly tick along, with a few big positive days and a few big negative days.
Missing those few key days in the market can absolutely ruin your long-term returns.
The FTSE 100 has had an annualised return of 6.7% over the past 20 years. £10k would have turned into £39k.
Miss the best FIVE days and that turns into a 4.7% annualised return. 2% less PER year – which means £10k would have become £26k.
Miss the best 30 days (one month out of twenty years!) and you lose money! £10k becomes £9k!
The big thing that the chart doesn’t show is that most of the time, the big positive days come hot on the heels of the bad days. Just when you’re feeling most scared is when things are likely to turn around.
30 of the BEST 40 days come within two weeks of one of the worst 40 days!
10 of the 40 BEST days come the DAY AFTER one of the worst 40 days!
The people who’ve sold aren’t going to be the ones buying back the next day (their brains won’t let them). They’re GIVING their long term returns to someone else.
Sell in haste, repent at leisure … much better not to sell in the first place.
If you have concerns about how your portfolio is positioned to weather the current market storm please feel free to get in touch via the link below.
