If you’re a sports fan you look forward to watching the championship game. You know how much time and effort it took for your team to get there and you want to experience the final big win too … feel that “thrill of victory.”
You might say, many investors today are like sports fans following their winning team. They may have a lot riding on the outcome of this long-running bull market. And they want to continue capitalizing on one of the longest economic expansions in history.
Since the 2007–2008 financial crisis, the U.S. equity market has climbed higher, and it’s been a while since we had a major pause. However, we believe the U.S. equity markets are entering the later phase of the bull-market run.
Now, the best time — and most difficult — to prepare for a bear market is right before the bull market ends — but, that’s difficult to predict, and unlike the championship game, a bull market doesn’t end suddenly when the clock runs out.
Of course, there will be signs to watch for, like additional volatility and a change in investment performance, but leaving the market too soon may mean missing out on late-cycle growth potential … which can be significant.
So, you may not want to leave during that last time out. There could be a come-from-behind victory you won’t want to miss — and, there’s always the possibility of overtime!
To learn more about how different asset classes perform late in a bull market and the signs that may signal the next cycle change, download our Wells Fargo Investment Institute special report: Investing Late in a Bull Market.
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