Stock Market Loss Rates Against Bonds (by Holding Period)

While trying to piece together a study about lost decades, I came across an interesting data point. On a 5 year rolling basis, stocks underperformed bonds nearly 25% of the time. Not only that, but stocks fail to beat bonds, on a ten year basis, 13% of the time. Another interesting nugget (second figure): If you held long term bonds from mid 1990 through 2002, you would have missed out on the entire dotcom bull market...and you still would have outperformed the S&P 500 over that time period (by a smidge). One final nugget (third figure). Lost decades^(1)(red) cover roughly 34% of the total sample. ***This shows that lost decades******^(1)*** ***aren't as rare as we'd expect.*** I think that we shouldn't necessarily be as scare of "missing out" as the common wisdom would have us believe...we will almost always get another shot at it. *That's not to say that I would ever advocate for going to all bonds or market timing or anything.* I'm still interrogating all of the data, but thought this was interesting enough to share... ^(1) I've defined "Lost Decade" as a period where stocks underperform bonds at some point during an 8-12 year look-ahead window.