The stock market over the last five years wasn't as much of a roller coaster ride as it was a single plunge, then a slow climb.
Since the market lost more than one third of its value in 2008, it has steadily rebounded, logging some double-digit gains.
Equities are back pretty much where they were in 2008 before the big drop prompted by the housing and banking crises.
For those saving for the future, with the goal of a comfortable retirement, what were the take-aways and lessons learned from the Great Recession?
The situation is not as dire as some may think. Total household assets are up close to the pre-2008 levels, said Timothy Kearney, Ph.D,, Misericordia University professor of business. Savings rates have swung from negatives to the positive and people are using credit more sparingly, he said.
Moderate expectations
People grew accustomed to double-digit returns. But, as the small print reads, those are never guaranteed. After the market decline took such a huge bite from portfolios, investors have learned to love 6 percent, said Kevin Palmiter, managing director of Northwestern Mutual Financial Network in Moosic.
"Ten years ago, you got laughed out of the room talking about 6 percent," he said. "Now, most advisers are reluctant to show an 8 percent projection."
Slow and steady growth in retirement savings should be the goal rather than double-digit gains, he said.
Saving more
During the Great Recession, some portfolios lost as much as half their value. For those who remained in the market, a lot of that came back to close to pre-recession levels. But people still lost a few years of investing and returns.
Many of those people began to save more, which is a good thing, said Mr. Kearney. People have paid down debt and started to invest more to get back on track.
"People should invest with the eye on their total net wealth - not market performance at any given time," he said. "Even though people may have gotten killed in the market, they need to remember that those savings will return in the future."
Employees with a 401(k) should at minimum invest enough to get the entirety of any employer match. Even without an employer match, people should use 401(k)s as a means of savings that brings with it a tax benefit.
Embrace risk
Portfolios were so hammered in 2008 and 2009, that stunned investors hunkered down, sought more security and waited for the storm to pass. That emotional strategy sacrificed gains made over the last three years. Yet, many investors are still risk averse, said Jack Conway, of Conway Financial Group in Dunmore.
"There's been a turnaround in the market," Mr. Conway said. "But people are still scared."
People are still saving, but saving differently and more defensively, he said. Some people may place their peace of mind above the opportunity costs of missing out on market gains. Investors needs to find their risk tolerance and go with it.
"If you are a low-risk investor, you lose some buying power, but you have peace of mind," he said. "What price can you put on peace of mind?"
The correct balance in a portfolio is the one that lets the investor sleep at night, Mr. Conway said.
But five years before planned retirement, Mr. Conway usually instructs his clients to begin paring equities back to about half the portfolio. But such recommendation come after consultation, taking into consideration investors' goal, risk tolerance, and total net worth.
Don't panic
People made a big mistake by pulling their money out of the market as it was on its way down, or even after it cratered, said Lou Ingargiola, of Ingargiola Wealth Management Group in Dunmore. Those who withdrew from the market locked in their losses and missed out on the rebound.
"Think of it this way: The market was at 12, fell to six, now it's back up to 12," he said. "If you jumped out at the bottom, you missed the doubling of the market and are still at six."
People should always have a quality investments and a portfolio that is balanced and in sync with their risk tolerance, he said. They should keep in mind they are investing for the long haul rather than chasing the next hot stock.
Contact the writer: dfalchek@timesshamrock.com