What happens when everyone is bullish in a downturn?

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Just about everyone expects a downturn to occur soon, although probably not nearly as impactful as 2008. Most of the investors I know are anticipating, if not excited, for a downturn to happen. In retrospect, 2008-2013 had a lot of great opportunities, and people want to capitalize on that. Let’s say a downturn happens, and investors are ready for it, won’t that counteract the effects of a downturn? I hope I explained that effectively... any thoughts?

Really depends on what things look like.

I hardly think most investors are going to be ready, and certainly not enough to cause some weird shift in supply/demand.  As with most downturns, those who have really tight margins will go away, many will weather the storm, few will be in a position to really capitalize. In 2008 plenty of investors lost theirs shirts, no reason to think more will be ready this time that last.

That said, I don't see the next economic burden to be in real estate, most likely equities.