This is a good question. The S&P 500 kind of dodges this question by its very nature. The S&P 500 constantly changes the stocks it holds. So if a stock falls

This is a good question. The S&P 500 kind of dodges this question by its very nature. The S&P 500 constantly changes the stocks it holds. So if a stock falls out of favor, say Sears, its dropped from the index. It's also important to Note that comparing the S&P 500 from 100 years ago to today is very naive as the methodology for what it holds has changed significantly over the years. Comparing the returns of the S&P 500 from 1900 to now is kind of like comparing the statistics of a baseball player from 1900 and now in isolation and using that as the sole determination of which player was better. http://www.joshuakennon.com/sp-500s-dirty-little-secret/ http://www.joshuakennon.com/sp-500s-dirty-little-secret/