The article also talks about lessons not learned from the tech bubble, how poorly many of the largest funds have done and whole section on 401k disappointments.
Here's one money quote;
The situation is worse, he says, for people who were already withdrawing 5% a year from a retirement account that has now sustained 30% to 40% losses because of overweighted equity allocations. These investors are "highly likely" to run out of assets before the market recovers, according to Mr. Bernstein. "For them, I'm afraid the game is lost," he says. Mr. Bernstein is a financial adviser from Oregon.I'm not saying that there are not people who aren't permanently impacted by the double bear markets of this decade but I have trouble believing that so many people really are permanently impacted. What I think is more likely is that many people think they are permanently impacted.
A friend made a comment in passing about working a little longer because of all this. From some things I read, some comments on the blog and other anecdotal items I think more people are thinking in these terms. I am all for things like working longer (not just for financial reasons), saving more and generally being more financially conservative but this is a bear market. Bear markets end eventually, before most people realize, and then they go up. I touched on this in more detail a few days ago but the odds are that ten years from now the market will be a lot higher. It usually is after ten years and all the more likely after ten years like we've just had.
Whenever the next cycle starts it is a good bet that there will be one or two big up years. This will bail out a lot of people even if just emotionally.
When I started writing so much about a bear market coming back in 2007 I'm not sure if anyone thought of me as a perma-bear or not. Now that we have dropped forty whatever percent and have become more constructive I'm not sure if anyone would think perma-bull.
Of course neither perma bear nor bull makes sense. The things addressed on this site are obviously just the basic idea that stocks don't go up forever nor do they go down forever. They go up most of the time but sometimes they go down like now. I believe very few people will be truly ruined by this bear market.
One unrelated item. Yesterday a college buddy friended me on Facebook and I was surprised by a couple of things in his profile (nothing bad) and Joellyn asked me how surprised did I think people from college or high school would be when looking at my profile. It was a brilliant question and we had a deep and introspective conversation about it. So how different have things turned out in your life compared to what you thought when you were 20?