You are correct "paper valuation only" until those who retired and had to sell during the collapse. These people were devastated when their stock was worth only 25% or less of what it was worth just the year prior to.
Imagine if you had counted on selling stock out of you 401 during that period of time. A lot of retired people needed to sell stock during that time or at least had plans for the money. These people couldn't be certain of a recovery. I know because we had plans and our stock was worth less than 25% from the prior year, it took several years for my wife and I to even get back to where it was, but we were in a position where we were able to wait.
You know as well as I do that millions of people have been hurt by the collapse and the end result was not just a "paper valuation only".
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