The Bull Market Is Getting Old: What Now?

The current bull market for stocks began March 9, 2009, which makes it 3.5 years old now.  What is the average duration for bull markets?  You guessed correctly... it's 3.5 years!

Got an Old Bull? Here's What to Do Now

Of course this doesn't mean that we should sell all of our stock mutual funds now and allocate 100% of our assets to cash, bonds or gold funds.  However, it does mean that we are likely closer to the end of this bull market (and closer to a new bear market) than we are to the beginning.

Now is a good time to check your asset allocation and re-balance your portfolio if necessary.  For example, if your allocation was originally targeted at 70% stocks and 30% bonds, it is likely that your stock allocation is higher now than say 3 months ago (stocks, as measure by the S&P 500 have climbed approximately 14% since June 1, 2012).  The allocation could now be 75% stocks and 25% bonds, which may be too aggressive in this particular case.

Also, if the time horizon for your investment objective is less than 5 years, you may consider shifting to a moderate portfolio or conservative portfolio.  For example, if you plan to retire in 3 years, you may want to reduce your exposure to stocks because the next bear market is likely to arrive before your retirement date.

If you have a long-term (more than 10-year) time horizon,  and you just want to be sure you have a solid asset allocation for your particular needs and risk tolerance, you may need to review the basics of how to build a portfolio of mutual funds.

What are your thoughts?  Does this bull still have some room to run or is a bear market waiting just around the corner?  Does it really matter either way to you?