it's a combintion of factors . . .

this time is different: 1. the impact of 401k's means that most of the retirement money is controlled by retail investors. in the past, with defined benefit plans, most of the money was in the hands of professionals. 2. portfolio manager's compensation is based on relative performance not absolute performance. this is not new but it does mean that, until a sector with substantial assets starts to sell in earnest, no one is going to make a move. 3. the role of government is now different. the average joe believes that the government will bail them out. worst case, why not wait it out because you may benefit just as bear stearns has. 4. investors now need the extra return that has historically been available from stocks. just look at the consumer balance sheet. leverage has never been higher nor has savings been lower. 5. fear will play a bigger role than usual in this market. periods of dullness will last longer than in the past and declines will be sharper than previously. 6. the longest bull market in history is now completing meaning that the average investor has no experience with either a bear market or the limits of government to manage the economy. so, the bottom line is that this market is just going to stumble along until hope is wrung out of the system. that means that it will be a trader's market - not an investor's market. none of my friends have sold out in spite of a 15-20% decline. have any of yours? if the answer is no, things will get worse in the economy before they get worse in the stock market. the old discounting mechanism has been stood on its head. the market is really now a headline reading mechanism.

Ditto !

so, the bottom line is that this market is just going to stumble along until hope is wrung out of the system. that means that it will be a trader's market - not an investor's market.

I have read similar comments recently.

As this mind set becomes more prevalent in the media you will know it's time for significant move up.