Why are the same investors who said they wanted another 2008 now unwilling to buy into the market?

[tvubpwcisla]

Over the years, I have heard from a countless number of investors who said, "I only wish it were 2008 all over again so I could purchase the market at a discount. I'm going to remain patiently on the sidelines until it is here and then my plan will call for me to purchase the equities and indexes that I have been waiting for while everyone else is selling." I hear from those same investors today and they are afraid. They are scared to pull the trigger and make the purchases. Why is that?

[oneleaf]

Over the years, I have heard from a countless number of investors who said, "I only wish it were 2008 all over again so I could purchase the market at a discount. I'm going to remain patiently on the sidelines until it is here and then my plan will call for me to purchase the equities and indexes that I have been waiting for while everyone else is selling." I hear from those same investors today and they are afraid. They are scared to pull the trigger and make the purchases. Why is that?

Anyone that says the outlook for the market is even worse today than it was in the thick of the GFC clearly forgot or wasn't paying attention. There was talk about S&P500 hitting zero in 2008/2009. And people were pretty hysterical back then too. Somehow, the forum these days is a whole new level of hysterics... it might be just that the forum has grown in size.

People truly forget that the reason a market crashes is the same reason you will be gripped in fear to invest.

That said, of course I'm worried today, as I was in 2008/2009. But I'm staying the course and rebalancing today as I did last time.

[JustinR]

This is a classic example of easier said than done.

We don't know how long this will last. You might need the funds to sustain yourself for quite a while. Unless you have huge stashes of cash on hand, it might be more prudent to not buy at this time.

"I want another 2008" sounds good in theory, but doesn't work as well in practice.

[pokebowl]

Anyone that says the outlook for the market is even worse today than it was in the thick of the GFC clearly forgot or wasn't paying attention. There was talk about S&P500 hitting zero in 2008/2009.

There are at least three separate discussions on this forum mentioning these points right now. 2008 2.0 confirmed? Other communities I visit are calling this the end of times. Same as it ever was in my mind. Panic fills the streets (internet forums) in every bear market.

[MindBogler]

They didn't learn anything the last time.

[Normchad]

People are a lot braver in their cars and on the internet than they are in real life.

I've made pretty big purchases in the last three weeks. And they've lost money already. So I'm brave, and possibly a fool as well.

[columbia]

As I had pointed out in those threads, it’s harder to buy in to market if you’re unemployed.

Be careful of what you ask for.

[hagridshut]

2008 was my 2nd crash, and it's not something I'd ever wish for again.

I know people who were absolutely devastated by the collateral effects of Wall Street's carelessness. Specifically, this took the form of lost homes, ruined retirement accounts due to panic selling, and prematurely ended careers. The dotcom crash was bad, but it didn't take down people permanently like 2008 did.

2009-2019 was a great Bull Market for those who kept their jobs and had disposable income to invest. For a lot of people, there was no "recovery", only bitterness from losing all they had worked for, and being shoved into a "gig economy" where they gave up all dignity in order to scrape together enough $ to survive to the next month.

[LSGP_545]

I started investing in 1996 when my dad opened up a TIRA at TIAA Cref with $525 I made as a part time cashier at K-Mart. 00-02 didn’t really phase me much as I didn’t have a huge investment account, but had several Vanguard and TRowe Prices by then....was also in the military and 9/11 seem to occupy most of my time. 08-09 caught me off guard. My wife and I (married by now) in my early 30s and saw drastic changes in our account values. I continued to buy, sold some positions, traded a little. We recently hit two commas in February, but I had greatly reduced equity exposure starting in Nov, so much so that when this hit we were 30/70, so we’re only down about 10% thus far. No longer with two commas, but continuing to rebalance as needed and buying on the big down days. Going forward, I think something between 50/50 and 60/40 would be reasonable for us. I’m elegible to retire in 6.5 years at 50 with a pension and another one at 60 (reserve military). I’m a buyer, just being careful about it.

[LovingLife]

Because everyone wants to go to heaven but no one wants to die in order to get there.

[james22]

Over the years, I have heard from a countless number of investors who said, "I only wish it were 2008 all over again so I could purchase the market at a discount. I'm going to remain patiently on the sidelines until it is here and then my plan will call for me to purchase the equities and indexes that I have been waiting for while everyone else is selling." I hear from those same investors today and they are afraid. They are scared to pull the trigger and make the purchases. Why is that?

I've waited patiently on the sidelines and now I'm buying.

Why is it you are afraid to acknowledge some are?

Is it because it makes you question your strategy? It shouldn't.

[Hyperchicken]

Because they wanted another 2008. What they got instead is 2020. Look at all the "this time it is different" threads.

[DonIce]

Because the market isn't down nearly as far as it was in 2008? In the GFC, the market dropped ~57% from its prior peak. Thus far (looking at the current futures price), we've only dropped 35% from the February peak.

[BillyK]

There is always a lot of big talk after a crash, but many investors are humbled and not so confident during one.

[Mickstick]

I've been keeping my monthly schedule but I think there are still more shoes to drop realistically. The corporate credit market seems like a disaster waiting to happen and we are still not sure how long the effects of the pandemic will keep the economy shut down. Originally I thought a 18,000 DOW might be near the bottom but with other factors still looming I think it could go a lot lower still.

[frugaltigris]

paper tigers

[ionball]

It could be a dry powder addiction problem.

[Atomic]

2008 felt like a financial crisis first and a job loss issue second. This is simply a life and death struggle requiring a level of collective discipline the world seems unable to muster. Health crisis first, demand/jobs crisis second, financial crisis last. The recipe for solving the first requires taking huge hits on the latter two. Who cares about stocks now?

[saintsfan342000]

It could be a dry powder addiction problem.

I never realized they were talking about that powder.

[manuvns]

maybe they don't have any cash .

[jello_nailer]

Because they wanted another 2008. What they got instead is 2020. Look at all the "this time it is different" threads.

^ This is a great point. If they got another 2008 they would understand it, but instead they got a 2020 which no one understands.

[tony_roach]

Well I was in the workforce during the dotcom crash, 9-11 and the 08,09 crisis...I'm still investing in my Roth, 401k and have been buying in taxable during these drops. I have my emergency fund and as long as I'm earning I'll keep buying.

[BogleAlltheWay]

The problem is when do you buy back in? Let's say you decide will buy when the indices are down 50%. If they don't go down that far then you miss out. When 50% comes they don't to buy because it might go down 60% etc.

[michoco911]

The problem is when do you buy back in? Let's say you decide will buy when the indices are down 50%. If they don't go down that far then you miss out. When 50% comes they don't to buy because it might go down 60% etc.

You set an investment policy and buy based on it without too much emotion.
Most of them do based on 5% asset allocation drift and i do the same.
I bought stocks last week when my asset allocation moved from 60/40 to 54.7/45.3 to get it back to 60/40
Will do the same if it happens again until things are clear about the virus and as long as my income is steady.

[Dfree]

The buy during a bear mentality lives. But some of us already have no income. I was happily buying until I was laid off Friday after 15 years in the same job. Grateful for my emergency fund but pissed that I had to quit buying vtsax.

[unclescrooge]

Over the years, I have heard from a countless number of investors who said, "I only wish it were 2008 all over again so I could purchase the market at a discount. I'm going to remain patiently on the sidelines until it is here and then my plan will call for me to purchase the equities and indexes that I have been waiting for while everyone else is selling." I hear from those same investors today and they are afraid. They are scared to pull the trigger and make the purchases. Why is that?

Investing is simple. But it is not easy.

If it was, everyone would be rich.

[Prahasaurus]

We are in the 2nd inning, and people are still acting as if it’s over.

My reasons for waiting longer before investing more cash are twofold:

1. The situation is worse than you realize.

2. The situation will deteriorate.

[HanSolo]

I started investing in 1996 when my dad opened up a TIRA at TIAA Cref with $525 I made as a part time cashier at K-Mart. 00-02 didn’t really phase me much as I didn’t have a huge investment account, but had several Vanguard and TRowe Prices by then....was also in the military and 9/11 seem to occupy most of my time. 08-09 caught me off guard. My wife and I (married by now) in my early 30s and saw drastic changes in our account values. I continued to buy, sold some positions, traded a little. We recently hit two commas in February, but I had greatly reduced equity exposure starting in Nov, so much so that when this hit we were 30/70, so we’re only down about 10% thus far. No longer with two commas, but continuing to rebalance as needed and buying on the big down days. Going forward, I think something between 50/50 and 60/40 would be reasonable for us. I’m elegible to retire in 6.5 years at 50 with a pension and another one at 60 (reserve military). I’m a buyer, just being careful about it.

I appreciate your story. I think it sets a good example.

[APX32]

We are in the 2nd inning, and people are still acting as if it’s over.

My reasons for waiting longer before investing more cash are twofold:

1. The situation is worse than you realize.

2. The situation will deteriorate.

I think these two points have still not been fully realized by a lot of people, both amongst the general populace as well as some members of this forum. At some point it will sink in, I believe that will be in April when the shutdowns get extended, layoffs accelerate and companies start announcing earnings misses and revised down guidance. The full scope of the unemployment disaster will also become clearer and who knows where we will be with infections and other numbers with the virus.

Let’s say we are down 50% by April, a very realistic possibility and that’s a bottom. Don’t forget the math, we would need to rally 100% just to get back to those all-time highs.

I know that one thing for certain, this market ain’t rallying 100% anytime soon.

[Prahasaurus]

We are in the 2nd inning, and people are still acting as if it’s over.

My reasons for waiting longer before investing more cash are twofold:

1. The situation is worse than you realize.

2. The situation will deteriorate.

I think these two points have still not been fully realized by a lot of people, both amongst the general populace as well as some members of this forum. At some point it will sink in, I believe that will be in April when the shutdowns get extended, layoffs accelerate and companies start announcing earnings misses and revised down guidance. The full scope of the unemployment disaster will also become clearer and who knows where we will be with infections and other numbers with the virus.

Let’s say we are down 50% by April, a very realistic possibility and that’s a bottom. Don’t forget the math, we would need to rally 100% just to get back to those all-time highs.

I know that one thing for certain, this market ain’t rallying 100% anytime soon.

Yes, I think we agree. Of course, we may both be wrong!

I think it's important to decouple two things that are somewhat linked, but not so clearly.

On the one hand is our situation today, and it's dire: mass layoffs, workers with no cash past a couple of weeks (probably half the US population, if recent polls are any guide), a pandemic that is about to bring down many US hospitals and kill many thousands at a minimum, etc. There is no way around this, it's terrible.

On the other hand, it's how markets will react to all of this. Some of this bad news is already baked in. Markets react confusingly at times to new information, so what appears to be very bad on the surface can occasionally even boost markets, etc. It's all so complex!

I am very confident about the first. Things will get very bad, I believe much worse than people realize. But regarding the second - how markets respond - I will admit I am not so confident.

I guess that's a long-winded way to say I have no idea what will happen to the S&P over the next few weeks/months! I believe they will fall further, and by hoarding cash, I suppose I'm acting on my beliefs. But my confidence level on what the market will do is not high.

The most important thing now, however, is not my portfolio, but making sure lives are saved, jobs are maintained as best as possible, and the country's economy does not fall off a cliff. This is when we need leaders who will really look at what is happening in the country and put citizens first over ideology. Am I confident that will happen? Not really.

[techland]

...... and the country's economy does not fall off a cliff.

Pretty sure that part has already happened. I think we are at the stage now, where we hope the rescue helicopter can find us in the ravine.

[MoneyMarathon]

Over the years, I have heard from a countless number of investors who said, "I only wish it were 2008 all over again so I could purchase the market at a discount. I'm going to remain patiently on the sidelines until it is here and then my plan will call for me to purchase the equities and indexes that I have been waiting for while everyone else is selling." I hear from those same investors today and they are afraid. They are scared to pull the trigger and make the purchases. Why is that?

If you're buying, why would you want to post that here? I don't need to convince chicken little that the sky isn't falling. I hope he sells.