Here’s What I’ve Been Reading…


by Jeff C. Johnson

Bull versus bear market

If you’re an investor or stock market follower, you’ve probably been seeing lots of articles, stories, and reports about the length of the present up-leg in stock prices, which began (more or less) in March 2009. Big gains have been made, and many in the media and even professionals are suggesting that action is needed 

Note: When things looked the darkest was the best time to get invested. This is always very clear in hindsight.

The stories I’ve been seeing say things like, “Market turn down is likely due to the length of the bull,” “Get ready for the bear market,” “Reduce stocks now,” and so forth. This present market, as measured by the Dow Jones Industrial Average, has expanded about 400 percent from the lows of 2009 and is approaching a record for longevity.

Well, here’s my recommendation, if you want it. Imagine I’m saying it loudly: YOU SHOULD ALWAYS BE READY FOR A SIGNIFICANT DOWNTURN IN THE MARKET!

Declines in market value are always possible (as are new rising markets). They’re also inevitable. Experience and study have taught me to be ready for stock dips, bumps, and sell-offs. Sometimes they are gradual retracements. At other times, they are breathtaking, a great word to describe some drops in stock market value.

Here’s something else I’ve learned from years at my desk. Whatever everyone is saying, in the media and on the street or in the coffee shop and at the bar, is almost always wrong! The masses almost never get it right. So do your own thinking and/or get help.

Stick to a long-term investment plan. Develop a written Investment Policy Statement and use it as your steady guide during rising markets so you don’t get too exuberant, and during declines so you don’t sell out for a permanent loss.