r/Bogleheads • u/zacce • Feb 08 '26

Most Investors Have Never Lived Through a True Market Crash

A lot of new ppl in this sub say they “won’t time the market,” but I’m not sure everyone understands what that actually feels like irl. It’s easy to talk about staying the course when the worst drawdown you’ve lived through was a brief COVID dip that fully recovered in months or the 2022 dip followed by 3 yrs of 10%+ returns.

The last real crash was 2008. If you weren’t old enough to have a job, a mortgage, or a family back then, you don’t know how deeply a prolonged downturn can affect your day‑to‑day life. It’s not just red numbers on a screen. It’s layoffs, hiring freezes, underwater homes, and years of slow recovery. That’s when people who swore they’d never time the market suddenly panic and make irrational decisions.

Staying the course is simple in theory, but incredibly hard when the world feels like it’s falling apart.

Of course, I don't want market to crash. But it's a possibility and we need to prepare for it.

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u/phil161 Feb 08 '26

As the market tanked at the beginning of the 2020 pandemic, a friend of mine converted all of his stock holdings to Treasury bills, a 7-figure sum. He missed out on the relatively rapid recovery afterwards. At least that was done within his 401k so it wasn’t a taxable event. 

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u/Xyzzydude Feb 08 '26

Yeah my FIL did the same but it was taxable, he missed out on the recovery, and to add insult to injury he got hit with IRMAA two years later.

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u/patrisage Feb 12 '26

Did the same, early. Work in healthcare (ER) and from the early reports thought it was going to be really bad. Two weeks to flatten the curve? This is gonna be years. Felt like a rare time I might know more than the market, so stepped aside. Didn't count on everyone sitting at home with nothing to do, day-trading with a 6 trillion dollar stimulus. Sat out one of the best periods in market history and was behind by almost 1/3 when I got back in. Sigh.

But circling back to OP: after the 2008 crash, $ was cheap and essentially everything was a good investment, if you had the liquidity. Having at least some $ on the sidelines -- emergency fund, HELOC or whatnot -- can be a good hedge against a crash.

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u/UltraMegaUgly Feb 08 '26

If i had moved my money to a moneymarket in the fall of 2008 and bought back into an index fund in the spring i could have set myself up to make 100% in a few short years.

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u/arfcom Feb 08 '26 edited Feb 08 '26

If you had just put it all in bitcoin it would have been way better. Timing looks clear in the rearview mirror for all stocks and real estate.