Americans have missed out on almost $200 billion of stock gains as they drained money from the market in the past four years, haunted by the financial crisis.

Assets in equity mutual, exchange-traded and closed-end funds increased about 85 percent to $5.6 trillion since the bull market began in March 2009, trailing the Standard & Poor's 500 Index's 94 percent advance, according to data compiled by Bloomberg and Morningstar Inc. The proportion of retirement funds in stocks fell about 0.5 percentage point, compared with an average rise of 8.2 percentage points in rallies since 1990.

The retreat shows that even the biggest gain since 1998 failed to heal investor confidence after the financial collapse thatwiped out $11 trillion in U.S. equity value was followed by record price swings in equities, a market breakdown that briefly erased $862 billion in share value and the slowest recovery from a recession since World War II. Individuals are withdrawing money as political leaders struggle to avert budget cuts that threaten to throw the economy into a new slump.

"Our biggest liability in the stock market has been the total destruction to confidence," James Paulsen, the chief investment strategist at Minneapolis-based Wells Capital Management, which oversees about $325 billion, said in a telephone interview. "There's just so much evidence of this recovery broadening."

David Fuller's view Major financial crises result in market crashes, as we have long known from financial history. Moreover, most relatively experienced investors have witnessed at least one major crash during their time in the markets.

To be caught in a market crash is traumatic for everyone. However, the biggest timing mistake most investors will ever make is to sell following a crash. With hindsight, it looks silly because valuations are much lower following the decline. Moreover, governments and their central banks introduce stimulative policies to both mitigate the damage and also to support a recovery.

Nevertheless, in the weeks immediately following a crash the pressure is intense because the crowd is most bearish at the bottom. This is particularly true among those who have sold near the lows. Having closed longs, the last thing they would wish for is a sustained market recovery.

This is why extremely bearish sentiment following a market slump is a valuable contrary indicator. If most people have already sold, and if central banks are becoming more accommodative, new demand will emerge and provide a significant recovery.

Incidentally, the best time to sell is when the participating crowd of investors is euphoric and the market is soaring well above its 200-day moving average, best seen on a weekly chart.

I am sure that every subscriber reading this copy will be able to cite numerous, significant recoveries following market crashes, and also plenty of selling opportunities after medium to longer-term uptrends which then accelerate higher at rates which cannot be sustained beyond the short to medium-term.