Let's deal with your worst fantasies: the "D" word. Some people have bandied it about — the prospect that perhaps this is the big...

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Let’s deal with your worst fantasies: the “D” word.

Some people have bandied it about — the prospect that perhaps this is the big one, the 100-year-flood in the stock market, or another depression.

Most market observers don’t feel that way. Certainly Federal Reserve Chairman Ben Bernanke, an expert on the Great Depression, is inventing new ways to fight the financial crisis.

Still, there is fear in the air. People are watching hard-earned savings bleed away in their 401(k)s.

But consider the worst period in history from an investor’s perspective.

The idea is not to say it will happen, but to provide a glimpse of the cruelest time U.S. investors have experienced to show that most did recover — and, depending on how long they were invested, could eventually have had remarkable gains.

It shows why advisers tell young investors to relax, because they have years to recover from early losses in the stock market.

It also shows that people in retirement, or close to retirement, are the ones who need to be cautious with their investments.

If you were 55 just before the stock market crashed in 1929, and had been rich enough to put $10,000 into the market while stocks seemed promising, you would have been in sorry shape by the time you planned to retire 10 years later.

After an 83 percent decline in the stock market by 1932, you would have recovered some of your money by retirement, but not all of it. You might have found the 10 years after the market crash to be torture, with downturns erasing the upturns.

And on your retirement date, you would have had just $6,020 for your nest egg, according to market data tracked by Ibbotson Associates, a Chicago research firm.

But what if before the crash, the 55-year-old had invested instead in the moderately conservative portfolio that financial advisers often suggest for people approaching retirement age?

If, at the peak of the stock market, the 55-year-old put 60 percent of his $10,000 investment into the stock market — measured by the Standard & Poor’s 500 index — and the remaining 40 percent in U.S. government bonds, the investor would have recovered his entire $10,000 by retirement at age 65, winding up with $10,208, according to Ibbotson.

It took a person who invested in the stock market alone just before the 1929 crash 13 years to recover all that was lost.

That, of course, was unusual: On average, stock investors have come out even two years after bear markets.

Waiting 13 years sounds like a fearsome amount of time — enough, perhaps, to send some baby boomers into a flight to safety.

But consider the person who was 45 just before the market crashed in 1929. If that person had invested $10,000 in the stock market, by retirement at 65 he would have recovered everything lost, and then some.

The investor would have gone into retirement with roughly $14,539, according to Ibbotson.

And if instead of stocks alone, the 45-year-old had chosen a moderate-risk portfolio of 60 percent in stocks and 40 percent in bonds, the sum at retirement would have been $20,123 — more than double the original investment.

But what about younger investors?

A 35-year-old this past week was terrified because she had lost $4,000 in her 401(k) and envisioned losing everything.

But consider the 35-year-old who invested $10,000 in the stock market just before the crash of ’29.

By the time retirement rolled round 30 years later, the 83 percent loss in the Depression would have become a distant memory: The person would have seen the crippled funds grow to $95,144.

A 25-year-old before the crash of 1929 would have fared even better.

The original $10,000 investment would have ended up being $210,344 by retirement.