And this illustrates one of the many issues with making claims via backtesting. In the engineering world, we often talk about how sensitive a system is to initial conditions. If investors, both individual and institutional, had access to everything we have access to today, do we think the sequence of returns starting in 1966 would roll out in the same way it did? Better? Worse? Strings of numbers without context have limited value.Yup.
What percentage of people who retired around 1966 do you think owned even one stock or bond or had a brokerage account? These were the survivors of the Great Depression. This was long before IRA or 401(k) accounts. A couple of percent? Certainly less than 5%. Generally only the very wealthy.
Keep in mind there were no IRA's until 1975, and there were no 401k's until 1980. There were no TIPS back then either. The advent of investment vehicles + the large portion of the Baby Boomer population beginning work and saving in the 1980's came along to create the secular bull market that lasted until 2000. The demographics today have created the current secular bull market that we are in, and there are even more investment vehicles available to today's workers than there were in the 1970's and 1980's.
We now have easy access to low cost taxable accounts with the click of a few buttons. We have Roth IRA's (began in 1998). We have HSA's. Easy access to 401k/403b/457b plans. We have TIPS. We have I Bonds. None of that existed from 1966-80.
TINA if one is saving for retirement as all of the Gen X, Millennials, Gen Z, and still working Boomers are doing by saving/investing month in and month out. Not sure that squares with Leesbro63 1966-81 era taking place all over again at this time mantra. Yet, knowing the history of the markets and what could happen remains an important element of one's planning, AA, and being the best prepared that we can to face what we will face in the coming years and decades.
Pretty certain that in 2084, there will be somebody posting up on what it would have been like to retire in 2025 in some shape or form.
CyclingDuo
Cheers
Statistics: Posted by dcabler — Fri Dec 26, 2025 6:51 am — Replies 100 — Views 14398