Here we go again.
During past bull markets, many Americans nearing retirement fleetingly acquired a nest egg adequate for later life. Then, as quickly as that nest egg came, it went—leaving behind regret, sleepless nights, and in the worst case, panic selling near the bottom that eliminated any possibility of recovery.
This happened in the late 1990s, as the tech-stock bubble produced a blizzard of paper millionaires that melted away faster than a cherry snow cone in August. It happened in the mid-2000s, as Americans grew ever more comfortable with stock-heavy portfolios and with treating their home equity as an ATM, only to be savaged by the worst financial crisis since the Depression.
And it will happen again. In March, the current bull market will be six years old. It might run an additional six years—or end in April. Regardless, the lesson from financial history is clear:
When you’ve won the game, stop playing.
Written By: William Bernstein
WSJ.com