Record Bull Market Hits New High: What’s Next for Your Investments?

Tuesday was a very big day for the U.S. stock market.

The S&P 500 index hit an intraday record high of 2,873.23. The index — which includes 500 of the top companies in the U.S. and serves as a benchmark for measuring the overall performance of the stock market — couldn’t maintain those lofty heights. It ended the day at 2,862.96, short of a record closing.

As if soaring share prices weren’t enough reason to party, there was a little icing to add to the celebratory cake: On Tuesday, the stock market also tied the mark for the longest bull market run in recorded history.

Since bottoming out in the last bear market on March 9, 2009, stocks have risen more than 300 percent. If you had invested $10,000 that day, you would have roughly $40,000 today.

So for long-time investors, Tuesday felt awfully good.

Alas, after you popped the cork on your Champagne and gobbled down that cake, the sugar high probably slowly wore off. Then, an uneasy thought might have popped into your mind: What happens now?

The foggy future for investors

The truth is that nobody knows. Money Talks News founder Stacy Johnson humbly admitted this fact last June, when stocks were soaring:

I was convinced that a Donald Trump presidential victory would result in a market crash. (I certainly wasn’t alone.) Nonetheless, I didn’t sell a thing. As we all now know, the experts, myself included, were spectacularly wrong. When Trump was elected, the Dow was around 18,000. Now it’s 22,000, more than 20 percent higher.

More than a year later, the Dow Jones Industrial Average — an index that comprises 30 leading stocks — is even higher. It closed at 25,822.29 Tuesday, just 3 percent below a record high.

Record highs and aging bull markets often have been signs that the stock market is headed soon for a correction — defined as a fall of 10 percent — or “bear market,” a plunge of 20 percent in market value.

But there is just no way to know. Here is Stacy again:

Bottom line? Timing the market is a fool’s game. Trust me: Even when the next market move looks obvious, it isn’t. And even if you do get out at the top, down the line you’ll be faced with another, equally difficult decision: when to buy back in.

So, for millions of investors, the best move right now is probably no move at all.

As Warren Buffett — arguably the greatest investor of all time — has said on numerous occasions, simply buying an index fund and holding it for the long run through thick and thin is probably the easiest and most certain way to accumulate wealth.

To quote the Oracle of Omaha: “Investors who avoid high and unnecessary costs and simply sit for an extended period with a collection of large, conservatively-financed American businesses will almost certainly do well.”

For more tips on investing, check out:

• “2-Minute Money Manager: How Do You Start Investing With Little Money?“
• “10 Tips for Sane, Successful Stock Investing“

Do you plan to change your investment strategy now that the stock market is smashing records? Let us know why or why not by commenting below or on our Facebook page.