U.S. stocks danced around new highs in late August, a relief for investors after months below the record set in January. But by any standard the bull market is long in the tooth, and a big pullback would not be surprising.
So, for millions of investors, the question is what is the smart strategy when the markets are setting new records – put more in, play it safe or hold the course?
No one knows what stocks will do, of course, but experts do have some tips for life in the nosebleed section.
First is to keep some perspective, says Rick Wholey, managing director of Baird’s Wholey Poitras Group in Chicago.
“New highs in the market aren’t necessarily a cause for concern,” he says. “Today’s new highs will seem low five to 10 years from now. The Dow Jones industrial average dropped 23 percent on Oct. 19, 1987, after peaking above 2,200 in August of that year.”
Now the Dow is near 26,000.
Read more: How to Cope With a Market Peak