The 15-Year MSCI World Myth: What German Investors Actually Need to Know About Long-Term Returns

The Statistical Sleight of Hand Behind “Never Losing Money”

The widely circulated histogram showing MSCI World returns over 15-year periods looks convincing at first glance. It suggests that investors who held for 15+ years never experienced negative returns. But here’s what most German investment blogs won’t tell you: the methodology matters more than the headline.

The analysis relies on standard bootstrap sampling, a technique that randomly shuffles historical returns to create synthetic 15-year periods. This approach treats each year’s performance as an independent event, essentially ignoring the sequential nature of market cycles. As technical discussions reveal, this method has significant limitations when your data set only spans 46 years but you’re analyzing 15-year windows.

The problem? Bootstrap sampling can underrepresent “good” years that happen to fall near the boundaries of your data range. Those stellar periods from 1979-1987 and 2011-2025 appear less frequently in the statistics than the bumpier years from 1994-2010. The result is a distribution that might look more reassuring than reality.

Real Data vs. Synthetic Confidence

Moving block bootstrapping, which preserves the sequence of returns, would be more accurate but requires far more data. To get statistically meaningful results with 15-year windows, you’d need 200-500 years of market history. Since we don’t have that, we’re essentially making educated guesses based on a limited sample size that includes just a handful of complete market cycles.

What does this mean for your Finanzplanung? The “never lost money” claim is based on a model, not a guarantee. The model shows that in synthetic scenarios, negative returns over 15 years are extremely rare. But extremely rare isn’t the same as impossible.

The 5-Year Reality Check That Should Worry You

Here’s where the data gets genuinely spicy. While 15-year periods look relatively safe, the analysis shows that 5-year holding periods carry an 11.5% chance of negative returns. That’s not a typo, more than one in ten investors who held MSCI World for five years would have lost money.

The distribution for 5-year windows reveals another uncomfortable truth: volatility doesn’t disappear just because you’re “long-term.” The best 5-year periods delivered returns around 28.6% annually, while the worst delivered significant losses. This 40+ percentage point spread explains why so many German investors panic-sell during downturns, they simply didn’t expect the roller coaster.

What 30 Years Actually Tells Us

The 30-year data offers more compelling evidence for long-term investing, but with a twist. Even if you hit the worst 1% of outcomes over 30 years, you’d still earn 1.8% annually. That’s not great, but it’s not catastrophic either. The best 1% of 30-year periods delivered 18.6% annually, substantially less than the best 5-year periods, showing how time dampens extremes.

This suggests that while longer holding periods reduce risk, they also compress potential returns at the high end. The Langfristanlage strategy works, but not because it guarantees riches, rather because it makes devastating losses increasingly unlikely.

German-Specific Considerations Your Broker Won’t Highlight

For investors using German brokers and planning in Euro, several factors complicate the rosy picture:

• Currency Risk: Most MSCI World ETFs are dollar-denominated. Your returns depend not just on stock performance but on EUR/USD exchange rates. When the euro strengthens against the dollar, as it has during several periods, your returns shrink even if the index rises.
• Tax Efficiency: The claim of “8% average returns” typically refers to gross performance. For German investors, Abgeltungssteuer at 26.375% (including Solidaritätszuschlag) takes a significant bite. The good news: equity ETFs benefit from a 30% Teilfreistellung, meaning you only pay tax on 70% of gains. Still, that 8% nominal return becomes closer to 6.2% after taxes for most investors.
• Dividend Treatment: The analysis often uses price indices that exclude dividends. When you factor in net dividends reinvested, returns improve by roughly 1-2% annually. But many German investors hold distributing ETFs for tax reasons, which changes the compounding math.

The Emerging Markets Wild Card

The research includes fascinating data on MSCI Emerging Markets over 15-year periods. The standard deviation is nearly as high as the 5-year MSCI World data, meaning emerging markets remain volatile even over longer timeframes. This challenges the common German portfolio strategy of adding 20-30% emerging markets for “diversification.”

What looks like diversification in theory can become correlation during crises. When global markets panic, the correlation between developed and emerging markets often approaches 1.0, providing little shelter when you need it most.

Practical Implications for Your ETF-Sparplan

So what should you actually do with this information?

1. Extend Your Time Horizon Beyond 15 Years: While 15 years looks good in models, real market cycles can be longer. Planning for 20-25 years provides a more robust buffer. If you’re starting a ETF-Sparplan at 40 for retirement, you’re in better shape than someone starting at 50.
2. Dollar-Cost Averaging Isn’t a Magic Shield: Many German investors believe their monthly Sparplan eliminates timing risk. It reduces but doesn’t eliminate it. If you start investing during a high-valuation period (like 2021), even 15 years might not deliver the historical average.
3. Consider Your Starting Valuation: The Shiller CAPE ratio for the US market (which dominates MSCI World at ~65%) currently sits well above historical averages. Starting valuations have strong predictive power for subsequent 10-15 year returns. Today’s high valuations suggest below-average returns ahead.
4. Emergency Fund Is Non-Negotiable: The 11.5% chance of negative returns over 5 years means you absolutely cannot invest money you might need in that timeframe. Your Notgroschen belongs in Tagesgeld, not ETFs.

The Gold Comparison That Puts Things in Perspective

The analysis includes 15-year returns for gold, which show different risk characteristics. While gold delivered lower average returns than equities, its return distribution over 15 years has historically been more consistent at the lower end. This doesn’t mean gold is “safer”, it means its downside risk has been more bounded, albeit with less upside.

For German investors worried about currency debasement and the ECB’s monetary policy, this suggests a small gold allocation (5-10%) might provide psychological comfort without severely impacting long-term returns.

What the Data Actually Supports

• Over 15-year periods, negative returns are historically rare but not impossible
• The average nominal return of ~8% since 1975 is real, but includes periods of high inflation
• Real returns (after inflation) have been closer to 5-6% annually
• Tax-adjusted returns for German investors are lower still
• Shorter timeframes carry meaningful risk that shouldn’t be ignored

The 15-year rule works as a heuristic, not a law of physics. It’s a reasonable guideline based on historical patterns, but patterns change. The transition from a 40-year bond bull market to a potentially inflationary environment could challenge assumptions built on 1975-2025 data.

Actionable Takeaways for German Investors

1. Use 15 years as a minimum, not a target: Plan for longer if possible
2. Calculate with 5-6% real returns: This builds in a margin of safety versus the headline 8%
3. Keep 3-5 years of expenses in safe assets: Protects against forced selling during downturns
4. Consider currency hedging: Some German brokers offer EUR-hedged versions that reduce USD exposure
5. Review your plan annually: Long-term doesn’t mean set-and-forget, especially as you approach your target date

The MSCI World remains a solid foundation for Langfristanlage in Germany, but understanding the statistical limitations behind the comforting claims makes you a more resilient investor. The goal isn’t to scare you out of the market, it’s to ensure your expectations match reality, so you can stick with your plan when the inevitable volatility arrives.