Lessons Learned from the 10-Year Bull Market


As you know, the economy and the market have increased for over 10 years now. Many investors are worrying about when this streak will end and how to time it. Some are not even investing at all. Steven Goldberg, a financial advisor, explains in this article the lessons he has learned from this 10-year bull market and prior markets. He also explains why and how he will continue to invest in this market.

Goldberg’s lessons also apply to real estate and include the following:

  1. Don’t stop investing; continue to invest at a steady rate through ups and downs. The last bear markets in recent memory lasted for two years each, 2007-2009 and 2000-2002. But these were the prime times to buy many assets, including real estate assets. If you stopped investing during those downturns, you likely missed some great opportunities. Even though it may be hard to find a great deal today, a good deal that will survive a downturn will likely still reward you over the long run. And if you continue to invest through bear markets, you will capture outsized returns when the market improves.

  2. If you’re going to sell, sell in baby steps. One of Steven’s biggest lessons was learned through watching clients who sold their entire portfolios all at once. They often missed the bottom, and bought back in at higher than they sold, losing significant value. That turned into an expensive lesson for some of his clients. Instead sell your investments incrementally. Timing the market is very hard to do, and if you’re selling or buying on emotions, you’re likely doing it wrong. You do not want to have all of your capital sitting on the sidelines when the market turns the other direction. Instead, consider selling a little and moving some of your invested capital to lower risk investments.

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  1. Don’t overdo it with one type of investment. Diversification is key. If you realize your portfolio is concentrated to only stocks or bonds, branch out from the stock market and buy something alternative. If your real estate portfolio is allocated to a particular asset type, class, or region consider changing your strategy. Invest in a different type of real estate asset or a new market. Do not continue to double down and put all your eggs in one asset class. The exercise of diversifying will also allow you to build a better understanding of different asset classes and develop a network of people to help you with your investing.

  2. Adjust your expectations as the market changes. Just because your stock portfolio or real estate investment was making a certain return 10 years ago, doesn’t mean it will continue in the years to come. You may need to adjust your expectations with the market. Adjust your perspective on what a good return looks like at different stages in the market. Balance the return against the risk you are taking and determine your tolerance to that risk. You may need to take more risk for the same return, and if you’re not comfortable, you will have to decrease your expected returns for lower risk. However, that does not mean you shouldn’t invest, it means you should reevaluate your tolerance to risk versus your expected returns and compare that to other competing investments.

If you need help diversifying your portfolio, developing a new real estate investing strategy, or figuring out what your expectations should be when it comes to real estate contact us here and we would be happy to help!

Content contributed by Mike Taravella

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Disclaimer: The content and information presented in this website are not intended as tax or legal advice. All opinions expressed and materials presented in this website should not be considered a solicitation or sale of securities. Please consult with your legal and tax professionals for questions and information regarding your personal financial situation.  Hardscrabble Investments LLC and their partners and representatives are not licensed financial advisors.

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