Came across a great quote from marketwatch where they reported about hedge funds' letters to their clients.

In reference to Warren Buffett's statement that now is a time to buy:

"Mr. Buffett has enough money to be able to have his holdings drop 50% and still fly in his jets and live the way in which he has become accustomed," Bass wrote. "Do you have enough capital to take what you have left, cut it in half, and continue to live the way you have for the past few years? I don't."

Not a lot of us have the ability to absorb a 50% drop.  So the next time you're thinking of putting money in the market, you should ask yourself the question above. The money I have in the market could go away 100% and it wouldn't have a substantial impact on my day-to-day life.  It would have a substantial impact on my ability to retire when I want.  But there is a difference.  The money to make the house payment next month is in a checking account.  I suspect that the people in hedge funds aren't putting the mortgage money into the hedge fund, but there could be a lot of us out there that are putting substantial paycheck money into the market.  This is such a shining example of why you should never even consider putting serious paycheck money into the markets (assuming you need most or all of your paycheck).  It's hard to imagine something like this happening when the VIX is below 10 as it was just a several months ago.  But it happens.  Stocks outperform bonds because you incur substantially more risk.  Here's the risk part, I hope you were prepared.