Welcome to the first edition of Next Zero Finance, where I explore bold investing strategies, wealth-building tactics, and alternative assets like collectibles to help unlock future potential from your portfolio. Today I am going to focus on one of the most timeless principles in investing that gets overlooked far too often, which is time in the market rather than timing the market. This concept underscores the power of staying invested over the long haul, especially when I look at the S&P 500’s performance over the past 25 years.
It’s always interesting to me when I hear investors say that we’re at a top and they’re going to wait for a pullback before allocating capital. The truth is that nobody can accurately predict when markets will reach a top and when a bear market will bottom out. This is where taking a data driven approach can help unlock alpha throughout your portfolio. Trying to time the market sounds appealing but predicting highs and lows is notoriously difficult. Market movements are influenced by unpredictable events like economic shifts, geopolitical tensions, and technological breakthroughs. Missing just a few of the best days can drastically reduce your returns. The historical data indicates that consistent investment into the S&P 500, regardless of short-term volatility, generates a winning strategy.
Unlike other studies I ran the math on what would have happened if an investor had saved up their capital and invested in the SPDR S&P 500 ETF (SPY) right before each major selloff over the past 25 years. The chart below represents the S&P 500 over the past 3 decades and there have been drastic drawdowns which included the dotcom bubble bursting, the financial crisis, the pandemic, inflation, and geopolitical conflicts that rocked the commodity markets and global trade. No matter what, the S&P 500 has always climbed higher given enough time in the market.
Below are some of the sharpest declines SPY has experienced:
-45.74% (-$69.75) drawdown 8/28/2000 SPY $152.50 to 9/23/25 SPY $82.75
-52.71% (-$82.40) drawdown 10/08/07 SPY $156.33 to 2/23/09 SPY $73.93
-32.32% (-$109.10) drawdown 2/10/20 SPY $337.60 to 3/16/20 SPY $228.80
-24.99% (-$118.98) drawdown 12/30/21 SPY $476.16 to 9/26/22 SPY $357.18
-21.39% (-$131.13) drawdown 2/19/25 SPY $612.93 to 4/8/25 SPY $481.80
That’s five bear markets over the past 25-years and one drawdown was so severe that SPY lost more than half its value. During each of these bear markets fear becomes a powerful emotion for many investors, and some make drastic decisions to get out and wait for the all-clear signal. The problem is that in investing there isn’t an all-clear signal that tells everyone that the carnage is over, and too many investors have missed out on the rebounds because their capital was on the sidelines.
I went ahead and gathered all of the data from SPY from the share prices over the past 25-years to each dividend payment. I built a model from 8/28/2000 to 8/11/25 which outlines what would have happened if the worst investor allocated capital at the six worst times over the past 25-years to SPY. I think the results are going to be shocking for many. I need to put a disclaimer that going back this far was difficult to get the exact dollar amounts from the charts on each specific date so in the calculations the share prices on the dividend payment dates may be off by a day or two. The model goes down 114 lines on my spreadsheet so I am only going to paste the first portion so everyone can see the first two initial investments and all of the quarterly dividends generated then reinvested back into SPY.
Below is a list of the six times the hypothetical investor with the worst timing would have allocated capital toward SPY:
Initial investment of $10,000 into SPY on 8/28/2000 would have purchased 65.57 shares at $152.50
Second investment of $10,000 into SPY on 10/8/2007 would have purchased 63.97 shares at $156.33
Third investment of $10,000 into SPY on 9/24/2018 would have purchased 34.40 shares at $290.72
Forth investment of $10,000 into SPY on 2/10/2020 would have purchased 29.62 shares at $337.60
Fifth investment of $10,000 into SPY on 12/31/2021 would have purchased 21 shares at $476.16
Sixth investment of $10,000 into SPY on 2/19/2025 would have purchased 16.32 shares at $612.93
A lot of people talk about the positive benefits of investing in an S&P 500 index fund and allowing the powers of compounding to work over an extended period of time but not many people discuss what the impact would be if someone had the worst timing they could possibly have while allocating capital toward an S&P 500 index fund. I aggregated the data and wanted to take this approach to show the investment community how well someone could do while having the worst timing possible.
Here are the actual statistics behind staying in SPY while allocating $10,000 on 8/28/2000, 10/8/2007, 9/24/2018, 2/10/2020, 12/31/2021, and 2/19/2025:
$60,000 allocated toward SPY out of pocket
230.88 shares acquired from the $60,000
$17,952.22 in dividend payments collected which is 29.92% of the initial investment
69.84 shares acquired through the dividend payments
300.71 total shares to date
SPY currently trades for $635.92
The 69.84 shares acquired through the dividend payments are not worth $44,411.88
The 230.88 shares purchased from the allocated capital is worth $146,818.44
The total investment is worth $191,230.32
The total return is $131,230.32 or 218.72%
Even if you consistently allocated capital at the worst times into SPY over the past 25-years you would have more than tripled your money. Investing in an S&P 500 index fund such as SPY has been a proven strategy to build wealth through time in the market regardless of where your entry points are. The results speak for themselves as SPY is a powerful tool for long-term wealth building. Time in the market allows the powers of compounding to produce exponential growth over time. By allocating $60,000 in increments of $10,000 at the worst possible times over the past 25-years has still allowed someone to more than triple their capital.