As with most things related to the stock market, nothing is cut and dry or black and white. Timing matters a lot. And I don’t mean trying to time the markets.
The other day, I made a video saying that buying when markets are down can be a great move. Someone commented, saying this was terrible advice, that his parents lost everything in '08 and should have sold into the sell-off to recover some capital.
This totally depends on the age of his parents at the time. It’s so important that, as you get older, you shift out of more stocks because markets are volatile. The last thing you want is to be a few years away from retirement and suddenly see your portfolio get wrecked, taking a decade to recover.
If his parents were 40 or 50 and sold everything into the chaos, that would have been a pretty bad move. Markets have a 100% recovery rate (and if we ever have a time when markets don’t recover, we’ll have WAY bigger problems than your Apple stock). At 40 or even 50, they likely had a decade or two left in the markets. And we’ve seen stocks recover since then.
But if his parents were in their 70s, then yeah, they probably shouldn’t have had everything in the stock market in the first place. You never know when a recession is going to hit. As you get older, the goal isn’t to keep making money, which is why most financial advisors recommend shifting from, say, 70% stocks to 30%. Money should be put into bonds, treasury bills, CDs, high-yield savings, ultra-high-quality dividend stocks, and maybe even some income properties.
Flatly saying "NO! EVERYONE SHOULD SELL IN A RECESSION" can be very misleading.
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