Balancing continued gains with preparation for potential pullbacks is key to managing this market phase.Both 2023 and 2024 have been remarkably positive, and even bonds, though limited, have started offering modest returns to investors.
Why? As valuations climb, expected future returns fall. It’s essential to remember that what’s already happened is in the rearview mirror—future gains are what matter now.In my view, the key is balance. On one hand, continue taking advantage of the market’s strength. On the other, prepare for potential pullbacks and deeper declines.
However, staying invested means being prepared to ride out the inevitable market dips, which could be as deep as 20%, 30%, or even 40% in extreme cases. This strategy allows us to capture attractive yields while keeping some skin in the equities game, ready to pivot back if markets turn.
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