The authors examine lost decades as recurring market regimes rather than rare anomalies, challenging the comfort of simple buy and hold. They argue U.S. equities have spent 35% of market history in these periods, with current valuations near historic extremes.
Navigating Lost Decades
CMT Association
Ryan Gorman
Research
23 Pages
Key Takeaways
Lost Decades Persist: Three U.S. lost decades consumed 54 years, or about 35% of history since 1871, with drawdowns reaching 50% to 77%.
Valuation Risk Elevated: CAPE is 39.9, the 99th percentile across 155 years, and the Buffett Indicator stands near 190%, both pointing to thinner long term return margins.
Best Days Cluster: From 1988 to 2025, 18 of the 20 best S&P 500 days occurred below the 200 day moving average.
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