It has been well documented that trying to avoid market downturns by selling out of stocks and moving to cash can be damaging to long-term portfolio values. And while there are strong behavioral motivations driving a desire to try and protect the portfolio on the downside, the chart below makes clear why it is so potentially dangerous to fall into this trap. The reason is that taking this approach requires an investor to get two things right – when to sell and when to buy once the market starts to recover – missing just a few days can have a severe impact. Over the last 21+ years, missing the 10 best days of returns in the S&P 500 would have resulted in a $1 million portfolio achieving one third of the average annual returns and less than half of the portfolio value versus a continuous investment over that time period. This is a strong argument for long-term institutions to remain committed to their policy allocations even in the face of very difficult market conditions.