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Bear Market Psychology

The most heartbreaking part of this bear market is the untold number of investor's retirement accounts being decimated. By decimated I mean losses of 40-60%. I have spoken with dozens of investors with 401(k) and IRAs, and the universal comment I receive is "I refuse to open my statements or look at my account online". These investors have accepted the ongoing losses because they believe there is no better choice.

The buy and hold mantra again rears it's ugly head again, "Don't worry the market always goes up in the long-term". And investors who are now down 50-60%, and must now make 100-300% to break even, continue to place their faith in the buy and hold fantasy. Unfortunately for these investors once this bear market is over, it will take five to six years of bull market gains just to break even.

If you a reader of this blog please let me know how you are doing in your retirement account by leaving a comment.

 

Posted on Friday, November 21, 2008 at 12:00PM by Registered CommenterMichael in | Comments1 Comment

Reader Comments (1)

I saw this coming a mile away so I have actually made money this year with short-term trading in my IRA and a nice 4%/yr guaranteed return with my 401K. My concern is in being able to act when the time comes, I missed a lot of opportunities short and long this year that I could have enjoyed if my actions followed my analysis.

Greg
December 30, 2008 | Unregistered Commentergreg
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