From 2000 to 2010, the overall stock market offered a negative return -- a so-called "lost decade." While some investors saw that as an urgent warning to steer clear of stocks, for most people that prolonged slump wasn't quite as tragic as it seemed. There's a much more dangerous sort of "lost decade" to worry about.

The decade's negative return is technically accurate, but it's only tragic for a subset of investors, not all of us. It was cruelest to those who weren't adding to their accounts over time. But most investors kept plunking dollars into the market, on their own or via retirement accounts at work. Each of those installments yielded a different performance.

Check out how an annual investment in an S&P 500 ETF would have fared over the past few years:

S&P 500 ETF over the past…

Average Annualized Return

1 year


2 years


3 years


4 years


5 years


10 years


15 years


20 years


25 years


Data: Yahoo! Finance.
*Raw index change, excluding dividends.

Clearly, every investment period produces a unique return. As we emerge from a recession, the stock market will start posting numbers without negative signs or parentheses. Since you never know exactly when a downturn will happen, or how long it will last, it's generally smart to keep investing over time, especially when prices are depressed. For those of us with retirement at least a decade or more away, downturns can ultimately deliver exciting bargains.

The real danger
Instead, you should really worry about the kind of decade you can lose all on our own -- the years of financial growth sacrificed to simple inaction. I started investing in my 30s, but I wish that financial wake-up call had come a decade earlier. Even when you know you should start saving, you might keep putting it off. All those days, months, years, or even decades you delay could have been money in the bank for you.

Don't let yourself become one of the sorry statistics trotted out every now and then by columnists like me. To spare yourself from an underfunded retirement, take action right now:

  • Assess your financial condition, and determine how much you'll need to retire with. Come up with a plan for how you'll get there.
  • Save and invest as aggressively as you need to -- probably more than you've been doing so far. (That doesn't mean you should take on extreme risks. Wild bets on lottery jackpots and penny stocks are overwhelmingly unlikely to pay off.)
  • Open and fund an IRA. A Roth IRA can even offer you tax-free income in retirement.
  • Make the most of your retirement plan at work, especially if your employer contributes matching funds to your 401(k) plan.
  • Expand your knowledge about investing and finance. Founding Fools Tom and David Gardner have provided a great place to get started, and Morgan Housel offers several good reads that can make you a better investor.

Don't put these matters off any longer. Your financial life hangs in the balance. The most damaging lost decade is the one you throw away all on your own. 

True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community.

Longtime Fool contributor Selena Maranjian does not own shares of any companies mentioned in this article. The Motley Fool is Fools writing for Fools.