Investors of a certain age recall all too well the end of the last bull market. From late 2007 to early 2009, the S&P 500 Index fell 56% and lost a staggering $11 trillion in market value. That painful memory has many of today’s investors wondering how long the current bull market will last and how they can protect their portfolios from its eventual, inevitable demise. The simple answer, surprising as it may sound, is “don’t worry about it.” Rest assured, I have not lost my mind.
Study after study shows that most investors buy-high and sell-low. This is because they’re convinced they can correctly identify the beginnings and endings of bull and bear markets when, in fact, they can’t… no one can. As a result, the millions of Americans who sold in 2008 when stocks were low missed out on the extraordinary gains that began in early 2009 and persist today.