I thought I would address a great question I am frequently asked: “Julia, is now a good time to invest? We are near all-time highs in the stock market, and I am just worried I will invest my money and then everything will go down, and I’ll lose everything.”
I typically reply with a wisecrack remark like, “Yes, that is exactly what is going to happen.” All joking aside, let’s look at the facts. The current bull market that started back in March 2009 is now officially the longest running bull market ever — topping the duration of the bull from the 1990s. Investors have shown conviction in U.S. stocks since the lows more than nine years ago, focusing on the growth of corporate profits and the strong economy to sustain this bull market.
By the way, a bull market is defined as a period of several months or years during which asset prices are consistently rising. To mark the end of a bull market, a 20 percent decline in the S & P 500 Index typically needs to happen. With several economic indicators pointing to continued growth, and more fuel left in the tank for this bull market rally, I urge new investors to proceed with caution and in line with your individual risk tolerance and timelines.
Understanding how the market works and your own personal financial goals is important in deciding when to invest. If your time frame is less than three years, I would advise against it unless you understand and are willing to accept the risk of losing money. If you’re saving for retirement or the longer term (three-plus years out) then I would encourage you to invest with diversification and go for it.
Julia Carlson is a registered principal with, and securities and advisory services are offered through LPL Financial, a registered investment advisor, member FINRA/SIPC. Information in this column is for general information only and not intended as investment, tax or legal advice. Please consult the appropriate professionals for specific information regarding your individual situation prior to making any financial decision. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
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