What did we learn during the 10 year Bull Market? What did we learn during the 10 year Bull Market?

2020 will mark 10 full years of the bull market in US stocks. While this is a remarkable trend, it will be important to hold on to some key takeaways from this period of time when cloudier skies inevitably come.

Here are five important lessons we have learned in the last 10 years.

1.     When the going gets tough, do nothing

Anyone who braved the meltdown, zigged when everyone zagged and put money IN to the market in 2008-09 can tell you that it was a good gamble. During the banking crisis when everything tumbled to historic lows, most people thought it was the end of the world. They pulled their money and cut their losses. But those who rode it out are fancy-free these days. See the initial investments made then skyrocket over the last decade. Investors who “took the money and ran” ended up locking in on those losses. They kept their cash, which inevitably loses value from inflation, and guaranteed that re-entry into the market when and if they did so would be at a premium. It took years to recover, but it happened and then some.

2.     Timing the market does not work

Dollar-cost averaging, a method most commonly used in 401(k) investing continued to make sense for those who were working and saving for retirement. It allowed them to continue to invest in the market with some degree of protection from short term volatility. Some, however, thought that they would “play” the market by timing investments in and out based on one event or another. Long story short—it does not work. In 2018 US investors lost twice as much as the S&P due to market timing.[i] Chasing past performance does not promise future fortunes and the best way to invest for the long-term is more like the turtle than the hare. “Slow and steady wins the race.”

3.     Keep your emergency fund full

Keeping at least six months of cash reserves in an emergency fund when you’re working (and 1-2 years of cash if you’re retired) is highly recommended. What that number will be is largely dependent on your cost of living and your income streams. These cash reserves can help you stay afloat during times of volatility while staying invested in the market. Without the protection of a six-month buffer, you might not be in the position to wait out the storm.

4.     Understand the costs of your investments

Mutual funds and ETFs come with costs and fees and it is important to know what they are and how they are affecting your bottom line. When the market is on the rise it is easy to overlook them because you are watching everything grow. It is, however, extremely painful to watch your investment shrink not only because of falling markets but also because of exorbitant fees that could, with some research be avoided. Mutual funds and ETFs provide great access and diversification to everyday investors. It is not recommended though, to invest in a fund whose fees exceed 0.3%. These fees are often not visible to the investor and subtracted from the total return so research here is key.

5.     Saving and investing is paramount to a successful financial future

Americans, now more than ever, must prepare ourselves for the future. We are living longer, healthier lives, and medical costs are rising. Funding a retirement that could last 30 or even 40 years is a daunting task and wherever you are in your life, you need to start saving and growing your retirement nest egg now. Add on top of the long time-horizon, helping family members or a medical emergency and the alarm is even greater. The best way to reduce the risks of being ill-prepared for retirement is to work with a financial advisor who puts your interests first always.

Whether the market is up or down, these five lessons hold value. A good advisor will practice these methods and encourage you to as well. To speak with a member of our team or set up a complimentary consultation, please contact us today at This email address is being protected from spambots. You need JavaScript enabled to view it. or 800-688-4352.


[i] https://www.fa-mag.com/news/u-s--investors-lost-twice-as-much-as-the-s-p-500-in-2018-43995.html


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About the Author

Bob Hanna

Bob Hanna

Bob feels strongly that you only retire once leaving no room for mistakes. He is dedicated to building and more importantly preserving investors assets. Bob is a Financial Advisor with Cambridge, an independent broker-dealer, honored to be among the most respected firms in the industry.

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