I'm guessing you're in the US. I'm sure you can find papers and articles doing back-testing to the 1920s, which would include the Great Depression. If you can wait long enough, things have always recovered and earned a return.
> Did you adjust your calculations for inflation? For the S&P 500, the absolute worst-case is 58 years of not being up, I believe. 1929 - 1987.
Not my calculations. That's also assuming that one has zero bonds: for most people, who are saving for retirement, the component of the portfolio that goes into fixed income rises as age approaches 65. What were bonds during that time?
Most average people don't have the stomach for 'raw' 100% equity holdings, and so bonds are often present; bonds also allow for having 'dry powder' available for rebalancing. Scenarios like these are why portfolio theory can be complicated:
* https://www.investopedia.com/managing-wealth/modern-portfoli...
* https://en.wikipedia.org/wiki/Modern_portfolio_theory
For good layman treatments on the subject I recommend the works of William J. Bernstein, The Intelligent Asset Allocator, The Four Pillars of Investing, and Rational Expectations:
* https://en.wikipedia.org/wiki/William_J._Bernstein
Recent interviews:
* https://rationalreminder.ca/podcast/108 (podcast)
* https://www.youtube.com/watch?v=haLGx8KlFvk (same, but video)
* https://www.youtube.com/watch?v=3GzkxkOEcWc
> Historically low bond yields: The room for rates to go lower is low.
One does not necessarily buy bonds for returns, but also (perhaps) to manage volatility (which is often used as a proxy to measure risk). And low bonds are not anything new:
* https://awealthofcommonsense.com/2020/05/low-bond-returns-ar...
And one has to look at the real return of bonds over the decades: yes nominal numbers are low now and were high in the past, but inflation was high in the past as well (e.g., 1980s).