The difference this time is that individual investors have experienced two major downturns in the past decade. First there was the technology bubble in 2000, then the financial crisis and Great Recession of 2008.
"A lot of individual investors got burned twice and as a result they swore off investing in equities," said McBride.
Instead, he said small investors have been "hunkering down" in more conservative investments, such as bonds and cash, which have returned next to nothing in the past few years.
Data on how much money is flowing into and out of mutual funds reflects this cautious approach. While investors began adding exposure to stocks in the first quarter of 2013, the flow of money into equity mutual funds has since tapered off.
But this strategy is even more risky than investing in stocks for investors saving for retirement, according to McBride.