The right time to start saving was in 1982. Bond yields were close to their all-time peak and the Dow Jones Industrial Average was around 1,000, a level it had flirted with in 1965.
The developed world economy was about to enter the “great moderation”, a lengthy period during which inflation fell and recessions were rare. You did not have to be a genius to make money, although many who prospered were awarded that title.
The wrong time to start saving was in 2000. Equities have underperformed government bonds since that date, while central banks have slashed the returns on cash. Workers retiring in 2012 after 30 years of saving will likely have a much smaller pension than those who retired in 1999.
In short, the market goes through long cycles as it moves from undervaluation to overvaluation and back again. Alas, we cannot be sure when the peaks and troughs in those cycles will occur. But we can learn a few lessons from history. It is fairly obvious that the likely future returns for government bond investors fall in line with yields. Some might argue that the key factor is real (after inflation ) rather than nominal yields but in current circumstances, there is no difference; both are very low. Bonds have enjoyed a 30-year bull market and the cycle seems certain to turn (and may have turned already; the low for 10-year Treasuries was 1.72%, back in September).