The current bull market, which is nine years in the making, ranks as the longest of all time. This persistent upward trend has eclipsed the market climb that spanned most of the 1990s. And, stocks are showing few signs of letting up. Synchronously, the economy has maintained a steady if unspectacular rate of growth. Patient investors have likely been rewarded, but the big question many have now is how long can this growth continue?
Current market environment
The primary fundamental factors that tend to drive the direction of the stock market look favorable. The economy continues on a positive growth track, inflation levels remain modest by historical standards, and corporate profits have been consistently growing. The stage appears set for these trends to endure in the near term.
Yet if history is any indicator, the good times will eventually come to an end. While many speculate about the timing of a market downturn, the reality is that it is very difficult to know in advance when such an event may occur. This is because bull markets don’t die of old age. Sudden turns in the markets and economy are often dictated by unpredictable external events. For example, if current trade tensions escalate dramatically, inflation rises at a more rapid rate or a major military conflict begins to emerge overseas, markets might react negatively.
Positioning your portfolio today
Amid this economic backdrop, should you make changes to your portfolio? There is no set answer that applies to every investor. If you are feeling good about the upward trend of stocks, don’t become complacent about your investments. On the other hand, if you are cautious or feeling jittery about what’s on the horizon, know there are steps you can take to feel more confident.
No matter your mindset, now is a good time to review your portfolio. Ask yourself the following questions as a starting point:
- Is your portfolio properly diversified to reflect the risk level you are willing to accept?
- Are you comfortable that your investment mix is appropriate given the time you have to achieve your key financial goals?
Remember not to be overly influenced by the headlines or day-to-day market changes. A better approach is to take the daily news in stride, keeping your long-term goals in the forefront as you look for persistent trends in the market. If you want help crafting a financial plan for your goals, determining your risk tolerance or assessing market patterns, consider consulting a financial advisor in your area.
Andrew R. Petty, CRPC®, APMA®, is a Private Wealth Advisor with Marlowe, Petty & Associates, a private wealth advisory practice of Ameriprise Financial Services, Inc . He offers fee-based financial planning and asset management strategies and has been in practice for 16 years. To contact him, please call 407-249-4006, visit his website at www.marlowepetty.com or stopover at his office at 10917 Dylan Loren Circle, Suite A, Orlando, FL 32825.
Investment advisory products and services are made available through Ameriprise Financial Services, Inc., a registered investment adviser.
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