Small Investors Lick Their Wounds After Wild Year

This week, TheStreet and RealMoney will be exploring the aftermath of Lehman Brothers' bankruptcy filing and the ensuing market chaos it brought to a head almost a year ago. Read all of our One Year Later coverage.

NEW YORK (TheStreet) -- Kaye Hickey had come down with a common ailment during the financial crisis: Investment-account phobia.

It was January 2009, and as the stock market continued to free fall in the wake of the worst economic malaise since the Great Depression, the 65-year-old retired schoolteacher refused to log in to her TIAA-CREF account online. Monthly statements stayed in their envelopes.

"I just didn't want to see how far it had gone down," she says now. Not until this summer could she steel herself for her first look since late 2008, and it wasn't pretty: At the market's absolute trough in March, Hickey estimates her and her husband Jim's portfolio had lost perhaps a third of its value.

"'We always have the farm'," Jim Hickey told his wife at one point, referring to a tract of family property in a rural area of southern Virginia. "'We can grow vegetables." It was unclear how much seriousness, and how much joke, he had allocated to that statement.

The financial and economic earthquake of the last year has shifted the landscape in radical ways for an investor class -- variously described as the small investor, the retail investor, the individual investor, or the "little guy" -- that owns roughly half the outstanding shares in U.S. public companies.

Much has been written, and said, about how the crisis has exploded whole schools of investment thought, how it has called into doubt the most basic and long-held investing precepts. Modern portfolio theory -- from buy-and-hold to diversification to asset allocation -- was pronounced seriously wounded, if not dead.