The S&P 500's past returns have improved over longer holding periods. That record cannot tell investors when a decline will come or guarantee future gains.
The 10-year Treasury yield reached 5.349% on Oct. 5, 2026, its highest level since April 3, 2002. It later eased to about 5.307%, according to CNBC's October Treasury-yield report. Rates can weigh on stocks. They cannot tell investors when the next decline will arrive.
Other risk signals are flashing, too. The Shiller cyclically adjusted price-to-earnings ratio compares prices with a decade of inflation-adjusted earnings. The Buffett indicator compares stock-market value with GDP. Both have pointed to historically high valuations. Market leadership has also narrowed around megacap technology stocks, while breadth across the major indexes has weakened. The article cites an inflation reading above 3%, but gives no date for it. It should not be treated as current market data.
On Sept. 30, 2026, the S&P 500 closed at 7,666.45, up 0.19%. It was about 1.6% below its Aug. 13 record close and had risen 12.1% year to date.
Time changes the historical odds
Figures cited in the article show positive S&P 500 returns in roughly 73% of one-year periods and 94% of 10-year periods. Every 20-year period in the cited record ended with a gain. The worst 30-year average annual return was 7.8%, and that stretch began during the Great Depression. The figures do not specify the return calculation or the full sample period. They describe a past pattern, not a forecast.
Those long periods included the stagflation of the 1970s, Black Monday in 1987, the dot-com bust, the 2008 financial crisis, the COVID-19 bear market and the 2022 inflation shock. Investors still faced losses along the way. The historical odds of ending with a gain improved over longer periods.
That distinction matters. As earlier analysis of the 20-year record explains, positive results across past periods do not mean investors can avoid declines or that the next period will follow the same path. Someone who may need the money soon faces a different risk from someone investing for decades.
IBK Securities put the S&P 500's 12-month forward P/E at 19.17, equivalent to an earnings yield of about 5.22%-nearly matching the 10-year Treasury yield at the time.
Earnings provide the long-term engine
Corporate earnings have supported stock prices over time. The figures cited put S&P 500 earnings per share at $44.63 in 1985 and $247.96 in 2025, an increase of more than 450%. That growth helps explain the market's long-run advance. It does not show how quickly earnings will grow from here or what investors will pay for them.
Price still matters. Historically, investors who bought at higher prices relative to earnings faced lower long-term return expectations. Western & Southern estimated that the S&P 500's forward price-to-earnings ratio fell from about 22 at the start of 2026 to around 19 by October. Higher interest rates weighed on equity valuations, according to its October valuation analysis. These measures can affect expected returns, but they do not show when stocks will fall. An expensive market can keep rising. A strong long-term case does not rule out sharp losses along the way.
Choose a horizon you can hold
The Vanguard S&P 500 ETF (VOO) offers exposure to U.S. large-cap stocks. The Vanguard Total Stock Market ETF (VTI) covers a broader share of the investable U.S. stock market. Both are presented as long-term options, not protection against losses. The difference is the market segment each fund holds. Investors still need to consider risk, their time horizon and whether they can leave the money invested through a downturn.
The practical test is not whether a valuation measure looks alarming today. It is whether the investment fits a timeline that can withstand volatility without forcing a sale at a bad moment. Historically, patience has worked better than trying to call every turn. It cannot guarantee a gain on any schedule. The S&P 500's long-term case depends on continued earnings growth. If that growth falters or prices outrun it, returns can disappoint. Staying invested makes sense only when an investor's time horizon and finances allow it.
An ETF does not change the risks of the stocks it holds. VOO tracks large U.S. companies, while VTI also includes stocks beyond that segment. Both can fall when the broader market declines. A long horizon may give earnings growth more time to affect returns. It cannot erase losses, make a high starting valuation irrelevant or ensure that an investor's cash needs match the market's recovery.
