I'm going to share my experience investing in the TSP. Granted, the TSP is a very diversified, low cost retirement plan, and many people are stuck with a 401(k) or 403(b) that is much less attractive. Also, most government jobs tend to be fairly secure, which may allow people to take more investment risks. But I don't think that what follows is anomalous, or unrealistic for most people. Below is the value (well, not the actual dollar value) of my TSP account over the past 14+ years. Over that time, I've invested at least enough to get the maximum match, and for roughly the last half of the period, I've put in the maximum I'm allowed.
For perspective, on July 1, 1998, the S&P closed a little above 1146. Now, it's not quite 200 point higher, but down since 2000. Yes, almost all of this period except the first couple years has been in the infamous "lost decade". But, my account value is close to its all-time high, and there have only four six month periods in the past 14 years when it has dropped (counting new contributions). I say this not to brag, but simply to point out that even in times when the market performance isn't that great, continuing to invest, staying the course, not panicking, and of course, minimizing costs really does work!
The following is the value of my TSP account on a logarithmic scale over the past 14+ years. The scale is set so that the value in the middle of 1998 is 1. The logarithmic base is a secret.
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7/1/1998 1.000 1/1/1999 1.306 7/1/1999 1.450 1/1/2000 1.633 7/1/2000 1.691 1/1/2001 1.743 7/1/2001 1.787 1/1/2002 1.831 7/1/2002 1.847 1/1/2003 1.844 7/1/2003 1.953 1/1/2004 2.120 7/1/2004 2.185 1/1/2005 2.331 7/1/2005 2.369 1/1/2006 2.484 7/1/2006 2.556 1/1/2007 2.645 7/1/2007 2.714 1/1/2008 2.741 7/1/2008 2.721 1/1/2009 2.566 7/1/2009 2.641 1/1/2010 2.768 7/1/2010 2.770 1/1/2011 2.902 7/1/2011 2.954 1/1/2012 2.926 2/7/2012 2.969
All those of you who are in the accumulation phase, with a reasonably stable income and access to a decent retirement account, can do the same thing I did. Staying the course works. Good luck to everyone in their financial future.