If you think you will know it when this bull market finally comes to an end, you are kidding yourself.
The vast majority of professional advisers who try to get in and out of
the stock market at the right time end up doing worse than those who
simply buy and hold through bull and bear markets alike. Even those few
who beat a buy-and-hold strategy during one period rarely beat it in the
next one.
What makes you so confident you can do better?
A surer strategy is to own a broad-market index fund through thick and
thin. If you are frightened by the prospect of another bear market, then
you should reduce your equity holdings now to whatever level you would
be comfortable holding through one.
Though that means you will miss out on gains if the market keeps rising,
odds are that you will more than make up for it by losing less in the
next bear market.
By Mark Hulbert
