Mutual Funds Weekly: Be wary of this bull market, but don’t fight it

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The best stock-investment strategy in this bull market has been to keep things simple. No fancy moves — just follow the money and go with the flow.

This can be hard to do if you believe you’re missing out on all the lucrative fun folks have been having with the FANG stocks and today’s other beauty contest winners.

But if you have a long-term horizon, like most investors, consider this: 1) A diversified portfolio needs more than the market’s darlings; 2) a stock doesn’t know you own it and doesn’t care, and 3) you’re more likely to sell as the market nears a bottom and buy near market tops (sell low, buy high), which is to say that timing is everything — and most of us can’t do it.

One bit of timing investors can do successfully is to recognize the difference between a fresh bull market and an older one like this. In mature markets, leadership is narrower and money tends to be showered on the top names. It would be good now to familiarize yourself with other characteristics of a mature stock market, because that’s the climate we’re in and you want to be prepared for any weather.

The raging bull is now an aging bull. So stock investors, respect your elders.

— Jonathan Burton

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