Referencing the chart, it also appears that there was a period of general stagnation between 1965 and 1980 ...
Actually, it was 1966 thru 1982.
Looking at the entire chart, you can see the tendency for the market to run in roughly 18-year supercycles. I don't think it's any coincidence that that timeframe is also roughly generational. The plateaus between the big runs serve to convince investors that the heyday of the big bull run ups are over and stocks have lost their luster. Note 'Newsweek's late-1979 cover headline "The Death Of Equities" -- the classic "bell ringing at the bottom" if there ever was one -- coupled with CNBC's breathless NASDAQ 5000 stories from 2000.
We appear to be smack-dab in the middle of one of those consolidating, numbing, grinding, stagnant periods now, when viewed from the perspective of the chart. From the inside, it's normal to think and react as you have -- stocks are doomed, our parents ran it up to dizzying heights and we're paying for it, maybe historically it did well but those days are over, etc, etc. From your shorter timeframe, that mindset appears to be accurate. But when seen against a backdrop of history, not so much.
You have a rare opportunity to amass a considerable investment foundation if you make your deposits during these stagnant periods, and stick to your asset allocation model. Rather than buying all the way up, you're going to end up with a relatively low and even cost basis. Once Newsweek publishes that next "Death" headline, and that bell rings, you can hold on for the ride. Remember the 12% isn't an annual interest rate, but an internal rate of return for the overall investment horizon. Some years it's nothing, some years it's going the wrong way. Some years it's REALLY going the wrong way (I'm looking at you 2002 and 2008).
But once it begins going your way, hoo-boy, is that ever fun. I mean REALLY fun.
Widen your time horizon. Gather the nuts for the winter. It seems like it'll never come, but spring will be here sooner than you think. You don't want to say "d'oh, if I had just..." when you look back on it from autumn.