Am I the only one left in the stock market?
I moved 90% from bonds to Money markets three weeks ago..
Now taking sizeable losses to the 10% that remains In equities. This is worse than most could imagine. I am positive we haven’t hit the bottom and any recovery could be 3-5 years if ever.
I think you're being too pessimistic. We may not have hit bottom quite yet, but JP Morgan analysts think that if the pandemic gets under control, meaning new cases drop to small numbers, the S&P500 will achieve new records in 1Q2021. They're not the only ones. Even if the pandemic can't be brought under control until one or more vaccines are widely available, that would likely occur in 2021-2022, and just the news will likely cause a huge buying spree in equities. There are negative scenarios, like vaccines aren't practical, but anti-viral treatments may still be, and there's hope that these drugs will be able to mitigate symptoms substantially.
In retrospect, I wish I had sold a few equities in our IRA accounts, but my market losses so far in non-tax-protected accounts still don't come close to meeting the Federal long-term capital gains rate for substantial amounts (23.8%) plus our state income tax (where capital gains are treated like regular income). It should also be noted that some widely held stocks are not down much at all, for example Walmart, Costco, and Amazon, and anything related to cloud computing is likely to have a very bright future.
The real issue is that for years now people have been told to invest in index funds, and when so many stocks have fallen precipitously they impact the index disproportionately, and then when you exit the index you're selling the good with the bad, and the entire market reacts. Just a few examples, GM is down about 50% in six months, and the airlines and hotel stocks are worse off. Bank stocks have taken big hits too. When you sell shares in an S&P500 fund you're selling GM and Walmart at the same time.
In my opinion the real issue many investors are coming up against is that they mistakenly thought index funds would protect them against jolts like this, quoting Warren Buffett and all that rot. They forget that Buffett's philosophy requires a 10-20 year horizon to play out. Most people don't have the stomach for that.
