CNBC had just finished a whirlwind tour of guests opining on how bad the market's outlook was, but had time for one more. "The reason the market can't make a bottom is that the bottom in the economy is far away," the guest from Barclays warned. "We're still not seeing any signs of life. ... Things will get worse before they get better."

"So what's your strategy?" host Maria Bartiromo asked.

"Stay defensive," came the reply.

That morning, Kevin Hassett -- co-author of the infamous Dow 36,000 -- wrote an op-ed in Bloomberg declaring, "It is no wonder that markets are imploding around us. Obama is giving us the War on Business."

Investor Bill Fleckenstein chimed in with his thoughts. "A market for window-shoppers only," he wrote.

Two days later, Nouriel Roubini, the NYU economist who called the economic collapse, would issue his next forecast: "How Low Can the Stock Market Go?" his article in Forbes asked. "Lower ... much lower," was his answer. "Expect ... new lows reached in the next months and the year ahead."

It was March 9, 2009 -- exactly three years ago today.

The S&P 500 hit 666 that day. Adjusted for inflation, it was the lowest level since 1992.

It was also the market bottom. An epic rally has since sent the S&P to 1,365, or a gain of 105% in three years.

How does that stack up historically? In short, sensationally. Since 1871, there have been 1,661 rolling three-year monthly periods (January 2000-January 2003; February 2000-February 2003, etc.). The period from March 2009 through March 2012 ranks as the 31st best, or the 98th percentile.

Interestingly, the next best period was from 1996-1999, which returned 101.5%. In other words, the last three years have been a better time to invest than the famous bull market of the late 1990s.

Those are the numbers. What have we learned from them? One big lesson sticks out to me.

As blogger Eddy Elfenbein recently wrote, "[No] one likes to admit this but the last three years have been great for buy-and-hold."

With the crash of 2008, and ensuing rebound, came a widespread belief -- presented as almost axiomatic -- that the practice of buy-and-hold investing was dead. More volatility allegedly meant investors could no longer just buy companies and wait indefinitely; you had to be able to get in and out to score good returns. "When will Wall Street and the financial media admit it? Probably never," Sy Harding wrote in Forbes. "But buy-and-hold as a strategy is dead and gone, if ever it was a viable strategy."

But buy-and-hold only looks dead if you start investing when stocks are expensive. Yes, if you purchased stocks in 2000, when the S&P traded at 40 times earnings, you suffered a lost decade. That's how investing works. Those who bought when valuations were more reasonable in 1995 and held through today have earned an average return of 8.3% a year (including dividends). Those who bought in 2003 have since earned 5% a year -- not bad, considering we suffered the worst recession in 80 years, an oil spike, two wars, financial scandal, global terrorist attacks, record deficits, a downgrade of U.S. debt, and a near shutdown of the federal government. Even those who bought in 2006 have earned 3% a year ever since. The jarring drops of the last several years only victimized those who willingly became victims by selling into them.

Buy-and-hold still works if you buy good companies at good prices. That has always been true; it's just easy to forget during boom years. The higher valuations are when you begin investing, the lower your returns will be afterward. Nothing about the past few years has changed that. If anything, the explosion of volatility has been a blessing for smart buy-and-hold investors, providing some of the best buying opportunities of the past century. The 31st best, to be exact.

For more on the recession and its impact on the stock market, check out my latest e-book, 50 Years in the Making: The Great Recession and Its Aftermath, on Amazon or Barnes & Noble. It's short, packed with information, and costs less than a buck.

Check back every Tuesday and Friday for Morgan Housel's columns on finance and economics.

At the time this article was published Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article. Follow him on Twitter @TMFHousel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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