Panic selling during a market crash is disastrous beyond the immediate loss. Data shows about a third of investors who sell in a panic never get back into equities. They lock in their losses and miss the subsequent recovery and decades of compounding returns, a far worse financial outcome.

Bear markets are not all the same. Deflationary shocks (like 2008) cause rapid collapses as earnings evaporate. Inflationary periods (like 1966-1982) cause a slow, grinding decline in real returns as valuations compress, even while nominal earnings may grow.

When national stock markets in Greece and Egypt closed during crises, their corresponding US-listed ETFs continued to trade. The price of these ETFs accurately predicted the level at which the underlying markets would reopen, proving their price discovery power.

Contrary to popular belief, the 1929 crash wasn't an instantaneous event. It took a full year for public confidence to erode and for the new reality to set in. This illustrates that markets can absorb financial shocks, but they cannot withstand a sustained, spiraling loss of confidence.

During profound economic instability, the winning strategy isn't chasing the highest returns, but rather avoiding catastrophic loss. The greatest risks are not missed upside, but holding only cash as inflation erodes its value or relying solely on a paycheck.

While low rates and high nominal growth typically favor equities, financial repression introduces a counterintuitive risk. If institutions are forced to buy government bonds, they must sell liquid assets—primarily equities. This could lead to a slow, multi-year decline in the S&P 500, mirroring the 1966-1982 period, instead of a sudden crash.

Unlike debt defaults that can trigger systemic financial crises, a stock market collapse primarily impacts the real economy. It reduces household wealth, which in turn curtails consumer spending. While painful, this wealth effect is a different and less systemically dangerous channel than a widespread credit event.

During a broad market downturn, the question 'where is the money going?' is based on a common misconception. Market cap is calculated from the last traded price, not total cash invested. When prices fall, that value isn't transferred; it's simply destroyed. As one speaker put it: 'The money was never there.'

Historical data across global stock markets shows that after a market doubles in one year, it is just as likely to double again the next year as it is to give back its gains. A full crash wiping out all profits is an extremely rare, sub-1% probability event.