If you have been an active investor in the financial markets over the past 10 years, you should be feeling good about your success. The S&P 500 is up an average of 14.26% over the 2015 to 2024 full-year periods. This compounded return would make a $100,000 investment ten years ago worth $374,179 at last year’s end. Yep, that’s a 3.74x

Add in another +18% for the S&P 500 year-to-date 2025, and you should feel like a financial guru for your family. These are just your average index returns, which anyone could capture through low-cost index funds or ETFs. For investors who overweighted the technology sector or happened to buy their own shares in the famous 7 or 10 stocks, their returns are even more impressive.

These staggering returns can easily lead one to extrapolate the past returns into the future and predict exciting results for your planned retirement date. The beach house can look in reach!

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The Facts

While I’m a constant optimist about the future, it helps to be a student of the past to consider other possible outcomes. The past decades’ CAGR (compound average growth rates) for the S&P 500 are:

2015-2024 – +14.26% Covid, AI Boom.

2005-2014 – + 7.67%. Great Financial Crisis

1995-2004 – + 12.07%. Dot-com Bubble and Bust

1985-1994 – +15.04%. Black Monday crash and Gulf War

Suppose you were a statistician or just a good odds maker. In that case, you might conclude that there could be challenging periods ahead of your retirement date, when the rolling ten-year returns could average 5-8% and the market could be down a few times in the decade ahead.

So, what should you do?

One of my mentors would remind me and any new investors in our funds that if you can’t handle being down 20% in the near future, then you shouldn’t be in the market and should stick to money market funds. This is called mental preparation.

If you’re a younger midlife male, you should look forward to the moment when the bull market takes a break so you can get in at lower valuations for the long road ahead. These are your key moments, and how you react to them will significantly affect your result. Many emotional investors sold on the dips, couldn’t take the pain, and missed the quick rebounds that often followed.

Looking Ahead

For those investors who have been involved over the past twenty years, we should be grateful for the gift of double-digit returns. We should also be careful not to set unrealistic expectations for the future, as mean reversion —the tendency for a variable to return to its long-term average —can be painful. We will undoubtedly face more volatility ahead, so it’s best to be aware of this possible outcome.

Success in the decade ahead won’t come from chasing the returns of the last. It will come from maintaining discipline during downturns, such as not selling in a panic, questioning why you own certain stocks, and continuing to invest when others are fearful, remembering that unrealized losses are the price of admission for long-term gains. The investors who thrive won’t be those who avoided all the pain, but those who stayed focused on the long game.

Your next 10 years won’t look like your last 10. And if you prepare yourself mentally and strategically for this reality, you’ll be positioned not just to survive the challenges ahead, but to capitalize on them.

Personally, I keep a dedicated cash stash in a segregated fund to deploy into my favorite assets when the inevitable panic arrives. The exact timing? Like Potter Stewart’s definition of pornography: I can’t define it, but I’ll damn well know it when I see it.

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Ron Speaker

Financial Consigliere

Midlife Male Contributor

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