With trillions of dollars in market wealth wiped out over the last two years, investors may be wondering when they'll recoup their losses.

Try eight years.

That's the opinion of academics at the London Business School, who say the S&P 500 has a 50% chance of returning to its all time highs in 2010 and a 50% chance that the breakthrough will come later.

"Investors should not harbor fantasies of an immediate return to either previous market levels or previous high rates of return," according to a paper co-authored by professors Elroy Dimson, Paul Marsh and Mike Staunton.

Iron Age

It's not surprising that the recovery could take the better part of a decade when you consider that the Wilshire 5000 Total Market index and S&P 500 must climb a whopping 80% to regain their old highs. (The S&P 500 topped out at 1527 on March 24, 2000.)

The 1990s were a golden age, and golden ages occur infrequently, the academics said. Investors should take a long-term view, and be ready for the inevitable periodic setbacks.

A look back at history shows just how painful the convalescence can be. After the 1973-1974 bear market, it took 10 years for investors to make back the money they lost. Although the S&P 500 actually reclaimed its previous high in 1979, inflation was high back then, so it took until 1983 for investors to recoup their losses in real terms.

The recovery process took even longer after the Crash of 1929. In fact, it wasn't until 1949 that stocks rose decisively above their pre-Crash highs in real terms. Meanwhile, in Japan, equities have been on a downward spiral for 13 years and analysts say the recovery will span multiple decades.

Good Luck

Of course, some individual stocks will never rebound. WorldCom, Enron, Adelphia and a string of other companies that have filed for bankruptcy are now practically worthless and are likely to stay that way.

And don't expect the Nasdaq to return as quickly as the broader averages. Charlie Crane, market strategist at Victory Capital Management, said eight years to 10 years for the tech-heavy index is probably a "conservative" estimate. If the Nasdaq were to rise at a compounded rate of 10% per year, as it has over the last 30 years, it would take between 14 and 15 years to climb back to its March 2000 height -- and that doesn't take into account a rise in inflation, which would erode the gains.

Still, reinvesting dividends would help to reduce that recovery time and experts note that stocks are still the best place to be over the long term. Since 1900, equities have consistently outperformed bonds and cash.

"It's important for investors to take the experience of the last two years and blend it with the experience of the prior three years," Crane said. "These have been extraordinary markets both on the upside and the downside and expectations need to be somewhere in between the two extremes."

Worse Off

Crane added that while the Nasdaq could take a considerable time to bounce back, the Dow could hit a new high much sooner. The industrial average needs to climb 39% to get back to its old high set in January 2000. At a compounded rate of 7.6% per year -- its historical rate over the last three decades -- the index could be breaking records in less than five years.

Still, the LBS study notes that gains will not necessarily come smoothly and that returns could in fact come in short bursts. It also stresses that a third and fourth year of declines isn't out of the question. Historically, markets have fallen for four consecutive years only 2% of the time since 1900 but in any given year the odds of the market declining stand at a surprisingly high 38%.

"If our economy ends up feeling more like Japan's economy, characterized by deflation and recession as opposed to low inflation and moderate economic growth then we could see another year of negative returns," Crane said. "But I would say the probability of such a scenario is low."