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John Bogle, of Vanguard fame, has been suggesting for some time now that a better index for long term investing is the Extended Total Market Index (which holds a representative sampling of all stocks below the S&P500). At the very least he believes that investors should divide their holdings between the S&P large cap and the Total Market.

As a side note: there have been 12 down years for the S&P500 since 1950. Until 1995 there had never been a run of winning years that was greater than three in a row - when 1998 ended up positive it broke a very long standing pattern. It is quite possible that the pattern will reassert itself going forward, so in the normal course of time one should expect two to three down years every decade.
On the other hand, there has only been 1 set of back to back down years - the infamous 1973-74 Bear Market (-17.4 & -29.7% -- now that was a nightmare). Assuming that this year won't end up positive, and it still might, the odds of next year being poor are - from an inductive point of view - fairly low.
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