I don't follow. The markets were low, great time to invest. Great time to buy a home. 2008 was bad for people who owned homes or were already investing.
You have to view it from a new investor's perspective. They have just started their career, earning (small amounts of) money for the first time, and investing would have them see a loss of 5-10% of their hard earned money, at least in the short term. They wouldn't know, or would have to believe that the loss will be outweighed by future returns at the time.
