I am not the first commentator to discuss the depressing fact that, over the decade ending Dec. 31, 2009, the S&P 500 index produced a net loss. Even with dividends added back into the annual results, the index lost a total of 15 percent or 1.6 percent on an annualized basis. And to make matters worse, if you added in the annual loss due to inflation, this would bring the annual loss to around 4.0 percent per year. What a shock to investors who casually assumed that 10 years were more than long enough to provide assurance that the stock market would produce positive performance.

If you had carefully studied the historical record, you would have discovered a number of past 10-year periods in which the stock market produced a negative real return.

The most recent 10-year period was the period ending the summer of 1982. According to Yale Professor Robert Shiller, the stock market's trailing real return that summer was minus 3.6 percent annualized. The other lost decades ended December 1974 when the trailing return was negative 3.3 percent, and June 1921 when it was a negative 3.1 percent.

The good news is that, in each past case since 1870 in which the market's trailing 10-year return was negative, its inflation-adjusted return over the subsequent 10 years was positive.

To be sure, there is no guarantee that the future will be like the past. It's just as likely that the stock market could produce two negative real return decades in a row. The stock market does not go up or down to please statisticians.

What killed this past decade were a total of some three years of bear markets, which simply overpowered the remaining bullish seven-year period. Some would say that this fact proves the importance of controlling downside risk more so than participating in every bullish period.

My personal observations are that investors never seem to grasp the fact that aligning yourself with the best performing ETF or mutual fund manager is simply not a good long-term strategy. 2008 has proven the fallacy of that type of allegiance. A simple and seldom used technique of portfolio management is to have a stop-loss rule in place to protect yourself from all those self-proclaiming market prognosticators. In addition to having a sound investment philosophy, you must have a sound exit strategy if you are to capture the long-term attributes of investing.

DALBAR investment research looked at the behavior of the average mutual fund investor over a 20-year period ending Dec. 31, 2007. The 20-year survey found that while the broad stock market (S&P500) returned an average of 11.82 percent over those 20 years, the average mutual fund investor bailed out at times, missing out on great market days, and only realized an average return of 4.48 percent. These are not good statistics and challenge the ability of many investors to invest in a meaningful way.

It may be time for you to seek professional help. You should be looking for a registered investment advisor who has a sound investment philosophy that you can commit too. As I've written about before there are at least 1,000 different investment systems that have validity. None of them are full-proof. Some of them can provide a better overall return than many do-it yourselfers as exhibited by the above 20-year survey from DALBAR.

Make your plans accordingly. Some registered investment advisors can create programs for account balances of less than $100K. Do not ever assume that you can make an investment and hold it through thick and thin. The market will teach you an expensive lesson even if you have the best of intentions.

Stanley Hargrave of Hargrave & Associates is a certified financial planner and specializes in financial management for business owners. He can be reached at Stanley.hargrave@sbcglobal.net.