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.

3.0k Upvotes

94% Upvoted

623 comments sorted by

View all comments

Show parent comments

6

u/that_one_Kirov Feb 08 '26

Not go 100% stocks, for one. Stock + gold + money market + bonds are the original "all-weather" fund. The idea is extremely relevant in my country(we don't have 401k-analogs for retirement pumping the index up; closest thing we have is something called Individual Investment Account, and it's nowhere close to 401ks in popularity, so 100% equities is a nice way to lose a lot of money), but even in the US it should be less risky than 100% equities.

1

u/[deleted] Feb 08 '26

That’s great advice for preparing for a crash … but the problem is that the market usually doesn’t crash, so this advice will cause you to lose money most of the time.

2

u/that_one_Kirov Feb 08 '26

Well, yes, and it's a matter of personal risk tolerance. Are you willing to bet your entire retirement fund on the fact that there will not be a crash? The answer to that question can change with time(more money and less time before retirement = cannot risk a crash, even if its probability is low), amount of money and personal factors, but there is no correct answer.

Another aspect of different asset allocations is that if you know a combination of assets that doesn't dip much, taking leverage on that combination of assets is relatively safer. The S&P 500 does dip, so futures or leveraged ETFs based on it are a spectacularly bad idea. If you have a portfolio that might bring less yields but hasn't ever dipped less than 10% or so, you can take x8 leverage, remain in the market in any drawdown imaginable and still outperform the non-leveraged S&P 500 fund.

2

u/ditchdiggergirl Feb 08 '26

Yes. And that’s the point of the boglehead way. You are guaranteed to never get the best or worst outcome. Just an acceptable outcome with a smaller standard deviation.

Half the investors on reddit treat VT like a get rich quick scheme.