Even if you are extremely unlucky, you will be still ahead in 10 years

General
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I did a quick exercise to back up the claim. Let’s say you are terrible at market timing and always buy at the market peak. Over the last 10 years Sept 2014 - Sept 2024, SPY hit 358 all-time highs, and you invested $100 each time. So, you’d have invested $35,800 in total, and today your portfolio would be worth around $73,000 — more than a 100% return in 10 years. This doesn’t even include the ~2% annual dividend. Based on the rule of 72, that’s about a 9% average annual return, even with poor timing. I believe the next 10 years will show similar results.

This analysis is for general market index ETFs and may not apply to individual stocks, even major ones like AAPL, NVDA, or MSFT.

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2

There are many ten-year periods with negative real returns. What you mentioned is not accurate. The situation is even worse if you look beyond US stocks.

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3

I completely agree. Given that we have not experienced a major crash in over 15 years, I am concerned that one might be coming within the next decade.

It is more prudent to say, You’ll likely be ahead in 20 years. :grinning:

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4

Do you recall hearing this in 2016–2018?

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5

Since I began trading in 2016, the market has likely been PRIMED for a significant collapse every six months or so. Time spent at the market compared to market timing.

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6

We also had 2 of them in 9 years. And we were very close to one in 2020. 2022 was pretty bad as well.

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Apart from the Great Depression, I don’t think there are many. You said genuine returns, and I agree.

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OP’s analysis seems off, but the key takeaway is that you can still see positive returns if you continue contributing throughout a lost decade.

A lost decade is more problematic if you are retired and not contributing, but it is not as dire if you are still investing each month.

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9

It seems that investing in stocks throughout any part of a ten-year bull market produced positive outcomes.

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10

In every rolling 20-year period from 1963 to the present, US common stocks have never underperformed US Treasury bills.

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In the 1980s, you would have outperformed the market if you had purchased a 15% Treasury. :joy:

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12

Treasury Bills significantly outperformed SPY for 13.5 years during the lost decade, and those with limited exposure to what I’ll broadly term fixed income were heavily impacted. This could happen again.

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Yes, but I meant to say 20-year spans, not 10-year ones. Stocks, in my opinion, have only outperformed T-bills during 80% of rolling 10-year periods.