There is definitely an “other side of the coin” to be looked at.
Slightly different methodology here–just looking at the 10 best and worst days since 1950–but an investor who stayed out the whole weeks that included the 10 best days would actually come out better than someone who stayed in the whole time.
http://www.wallstreetcourier.com/v/data_download/WallStreetC…
Theoretically, if an investor would have just stayed out of the market for the whole week, where one of those best days have had occurred, he would have had a great chance to miss one of the worst days as well. In total, such an investor would have ended up with a portfolio worth $23,057, compared to just $16,212 for the one that had followed a buy and hold strategy!
Given that market volatility is increased during bear markets, it makes sense–many of the “best days” are probably dead cat bounces during bear markets.