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There was a nice piece on – you guessed it – CNBC earlier this week, about how an investor who bought the S&P 500 the day before they shut the doors for good at Lehman and held on 'til today would now be up more than 130% on the position, while earning about 11% a year on their stake.
CNBC also points out that it was a scary trip up the mountain as the markets continued to decline for another six months after Lehman Bros tanked – call it "L-Day."
Factually, they're not wrong: Those returns are what they appear to be. And the volatility was insane, with sharp countertrend rallies being crushed in short order by waves of selling. You could reasonably call a lot of that return "combat pay" for those brave enough to hang on.
130% over 10 years isn't bad… but it's still not really enough for all the risk that you took along the way.
In fact, indexing rarely gives you enough return to compensate for the risks you take when investing in stocks.