A lot of press has been generated from the fact that the first decade of the 2000s was a lousy one for investors. Some even went so far as to call it the worst decade ever.

Well, even for a lousy decade, it was trivially easy to make money. All you had to do was dollar-cost average into a low-cost S&P 500 index fund and reinvest your dividends along the way.

Beat the headlines
It's true that the S&P 500 index fell an alarming 24.1% over that particular 10-year stretch. But someone who invested $100 a month in the SPDRs (an exchange-traded fund that tracks that index) and reinvested dividends actually earned a total 5.9%. That investment turned $12,000 worth of capital into $12,709. It wasn't much, but if that's the kind of returns you can get in the worst decade ever, imagine how well you can do in a more normal investing climate.

Ordinary folks, after all, don't make a one-time investment and then simply let it ride. For the most part, regular people invest a little bit at a time, either with their paychecks or when they've got some extra cash available. As you can tell, there can be a huge difference between the market's headline returns and what real people see when investing real cash in a real strategy.

When all is said and done, the money you'll have available for your retirement is money you will have saved throughout your entire career. That makes noisy nonsense such as the handwringing over the decade-long decline in the market all the more dangerous. If such headlines discourage people from investing, then those people will miss out on all the returns they would have gotten over their careers -- the returns made possible by making regular investments over time.

What you get for your money
If investing still seems like an outrageous idea thanks to the past 10 years' lousy returns, remember that stocks are simply small ownership stakes in companies. And market indexes -- like the S&P 500 -- are nothing more than collections of stocks. So when you invest in a market-tracking fund, what you're really buying are tiny slices of hundreds of companies, like these:


Trailing Earnings
(in Millions)

of S&P 500




Philip Morris International (NYSE: PM)



Abbott Labs (NYSE: ABT)



Schlumberger (NYSE: SLB)



McDonald's (NYSE: MCD)



United Technologies (NYSE: UTX)



Qualcomm (Nasdaq: QCOM)



Sources: IndexArb and Capital IQ, a division of Standard & Poor's.

As long as the companies behind those stocks remain profitable, their shares should be worth something. And as their management teams work to grow their businesses and profits over time, their share prices can rise in response to that growth. You know -- the kind of returns people expect in markets that don't turn out to be the worst 10 years ever.

Real strategies for real people
At Motley Fool Rule Your Retirement, we've read the same headlines and lived through the same 10 years that every other investor has. The difference is that we're grounded in the real world, where real people invest their cash over time. Our tools, techniques, and strategies are dedicated to helping you design and fund your best possible retirement, based on how investing really works for regular people.

If you're ready to get past the headline-driven fearmongering and focus on a plan that's based on reality and can actually take you from here to retired, join us today. To see the practical tools and strategies we provide to our members, click here to start your 30-day free trial. There's no obligation.

This article was originally published Jan. 20, 2010. It has been updated.

At the time of publication, Fool contributor Chuck Saletta did not own shares of any company mentioned in this article. Philip Morris International is a Motley Fool Global Gains selection. The Fool has a disclosure policy.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.