I recently received an email from a reader suggesting that the 2022 decline in the market is "no big deal" because of the stellar returns over the last decade. He quoted a snippet of an article by Ben Carlson.

"To be fair, these losses need to be put into perspective. The gains leading up to this slaughter were gigantic. These are the annual returns for the Nasdaq since the Great Financial Crisis ended:"

2009: +45.3%

2010: +18.0%

2011: -0.8%

2012: +17.9%

2013: +40.9%

2014: +14.7%

2015: +7.0%

2016: +8.9%

2017: +29.6%

2018: -2.8%

2019: +36.7%

2020: +44.9%

2021: +22.2%

For those of you scoring at home, that's returns of more than 20% per year for 13 years!

Ben's math is correct. As such, the reader's email suggests the 2022 drawdown is nothing to be concerned with because of gargantuan percentage returns in previous years. To be exact:

"Yes, I gave up 2021 gains, but I still have all the previous years in the bank."

Unfortunately, that isn't how math works; therein lies the investing lesson we must learn. As shown, corrections that seem small on a percentage basis can wipe out years of gains.