Even now, the vast majority of investment advisors would strongly urge people not to give up on stocks, especially when most of the damage to their portfolios arguably has already been inflicted.
Most individual investors are sticking with that advice.
But for many, this time is different.
"What's really scaring investors today is whether this mega-meltdown will take 25 years to get back to even, like it did after the Great Depression," said Sam Stovall, chief investment strategist at Standard & Poor's.
The article goes on to quote a couple of boomer investors; the first quote is from a 55-year old accounting consultant named Don Abbee:
"I feel fairly helpless, and I don't know what I can do to change it," he said. "If you stay in the stock market long enough, it's supposed to come back up, but I'm becoming more skeptical. This market feels different."
Bill Orton, a 46-year-old political consultant, is going through a similar apostasy. His faith in the stock market, merely shaken by the tech crash, is now shattered, he said.
A stock fund he bought a few years ago has plunged in value, while U.S. savings bonds he picked up at the same time have been a rock of stability. Orton now declares himself finished with stocks.
"But I am feeling really good about those savings bonds," he said. "I like bonds."
When enough investors decide that they like bonds too, we'll probably see the average dividend yields on stocks rise until stocks become attractive to them. It's worth remembering that there have been times when the average dividend yield on stocks was higher than the average yield on corporate bonds.
1Secular, Katsenelson's terminology, refers to trends that last for 5 years or longer; cyclical refers to trends that last for less than five years. So the current secular range-bound market has included the cyclical bear market from 2000-2002, the cyclical bull market from 2002-2007, and the current cyclical bear market.