I had a chat with a retired couple today who had a very large investment portfolio before the 2008 crash (circa 7 million), managed on a discretionary basis by a prominent investment house. They say the portfolio as a whole lost 70% of its value during the crash as they were heavily in Irish and UK bank shares. They decided to 'stay the course' and it has since recovered 40% of its value. They are still loyal to the investment manager and don't blame him at all as they feel that everyone lost big in the crash and these are just the risks you take in the market. These are intelligent people with plenty of investment experience. I'm trying to make sense of this but can't understand it - surely the investment house failed to diversify adequately to protect them against such a huge loss and surely the portfolio as a whole should have recovered by now? What am I missing here? I'm a nervous investor at the best of times and stories like this give me the heebyjeebies!