Over the last decade there have been two years when the S&P 500 index had returns of about 30% (and it's on track to do that in 2019), two years when it had essentially no gain, and one year when it lost 6% of its value -- and in the two and a half year period from September 21, 2007 to March 6, 2009 it lost about half its value.
VOLATILITY OF S&P 500
by Ernesto R. Martin
Since an investment in the S&P 500 is for the long term, desirably 10 years or more, how it did in any given year is less important than how it does over a period of several years. Earlier you learned that the index has had an average annual return of 6.1% over the past 20 years and 9.7% over the past 30 years, with dividends reinvested.
But what if you wanted to know how the index did in a 10-year period. That depends on the starting year you choose to look at. The table shows the average annualized return of the index for each 10-year period starting in 1980. Over those 28 starting periods, note that 24 had positive returns (and some were rather large), 1 had a negligible return and 3 had losses. So while the chances are small, even a 10-year investment does not guarantee a positive return. (Incidentally, since 1980 there has never been a 20-year period where the average annualized return was negative.)
Most investors would find these odds acceptable. If you don't, look at the later section on investing in real estate with a mortgage. More hands-on and less liquid than a stock investment but average annualized returns that are comparable to the long-term S&P 500 index annual average (in the 7% to 10% range) with little volatility.