Bull Markets Usually Don’t End With a Bang

Unlike bear-market bottoms, which tend to be short and violent, bull-market tops in the stock market tend to occur gradually over time, as first one sector or investment style hits its peak and turns down, and then another.

That means investors shouldn’t manage their stock portfolios on the assumption there will be an exact day before which it would make sense to be 100% invested and afterward to be in cash. Even if pinpoint stock-market timing weren’t incredibly difficult, it still would make more sense to gradually build up cash as individual positions hit their targets.

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