Lost decade

Lost decade — a ten-year stretch in which equities return roughly nothing: the S&P 500’s −0.9%/yr total return 2000–2009, the 1930s, and — the outer case — Japan’s Nikkei needing 34 years to reclaim its 1989 peak. US stocks underperformed T-bills in ~15% of rolling 10-year periods since 1926, so lost decades are a recurring feature, not an anomaly. The planning consequences: the index is a 20-year instrument, no forced sales may ever meet a lost decade, and contributions continue through it — that’s when they buy the cheap units.

First used in: 5.3 · The S&P leverage point and the barbell