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There’s an old Wall Street saying: No one ever rings a bell at the top. Only in hindsight do we know that the market has peaked and is headed down.

There’s another Wall Street truism that's relevant here: Bull markets climb stairs, but bear markets ride a slide. In other words, stocks go down far faster than they go up.

One of the greatest lessons the stock market teaches is humility. No one can call the tops in any market cycle. And everyone who has said “Get out of the market” has been proved wrong. After all, we continue making all-time highs in the major averages. So, if you stuck around — as Warren Buffet did — you eventually came out ahead.

The key is the word “eventually.” While market statisticians and historians and institutional money managers can afford to take the longest perspective, can you say the same? Or is your time horizon more limited — perhaps because retirement is fast approaching?

That is the question you must ask yourself right now — as the market approaches another headline mega-number — Dow 50,000 — and attracts the attention of the media and pundits. Instead of being proud and complacent, self-preservation demands you be analytical and conservative.

The Baby Boom generation has had unprecedented direct investment exposure to the stock market. While older generations earned pensions generated by huge institutional pools of money, the boomers can check the value of their 401(k) accounts or IRAs online, instantly. And they are responsible for their own investment decisions.

The bull market has created unexpected wealth. The latest survey of retirement accounts by Fidelity shows there were 654,000 401(k) millionaires, the highest level ever, according to the Wall Street Journal. At T. Rowe Price, about 2.6% of plan participants had balances above $1 million, up from 1.3% at the end of 2022. And a significantly high percentage of those accounts have more than 70% of assets invested in stocks.

Congratulations. Now what? Or, better yet, what if?

Letting your money ride in the market has been a successful and profitable strategy. Why change now? Because time is running out. Not time for the bull market, but time until you need to spend the cash.

According to Investech.com, there have been 10 bear markets since 1956, representing an average decline in the Dow Jones Industrial Average of 33.5% from top to bottom. On average those bear markets lasted 1.3 years from market peak to bottom, and required an average of 4.5 years to fully recover.

But averages can mask extremes. The bear market that started in January 1973 took the DJIA down a staggering 45.1% in 23 months. And it took 9.8 years for the market to reach its previous highs. And after adjusting for inflation, the break-even point was closer to 20 years!

In more recent history, the bear market associated with the dot-com bust in 2000 was the third longest in history, with the S&P 500 dropping nearly 50% from peak to bottom. And in 2007-2008 the market declined 53% from the peak!

The fact that today’s investors might be surprised by those statistics is a testament to the short memory of pain, and the powerful attraction of greed. Yes, it all worked out well for those who stayed invested, since the market is now at all-time highs. But someone sold at the bottom — out of fear or panic or need.

And that’s the point of suggesting you reassess your stock market gains as we approach year end. This is not about calculating stock market price/earnings ratios, or the impact of economic policy or the future of A-1.

Young investors just starting out should always bet on the future growth of America. But baby boomers face a more immediate challenge: making your money last as long as you do.

This is not about market timing. This is about asset allocation. This is about capital preservation. This is about self-discipline.

This is about sleeping at night during your retirement by switching a portion of your retirement funds to the short-term bond fund in your plan or a money market mutual fund or T-bills. Listen to your gut — not your 32-year old “financial adviser.”

Better yet, listen to Warren Buffett, who has raised a record $380 billion cash hoard inside Berkshire Hathaway. He now owns more T-bills than the Federal Reserve! If he is satisfied with earning only about 3.6% on T-bills, why should you risk more?

Buffett isn’t giving up on America, and he’s not afraid of “running out of money.” He’s waiting for bargains at lower prices. And if he is willing to sell some stocks to amass a record pile of cash, shouldn’t you consider doing the same?

That’s the question you should ask yourself now. And that’s The Savage Truth.

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(Terry Savage is a registered investment adviser and the author of four best-selling books, including “The Savage Truth on Money.” Terry responds to questions on her blog at TerrySavage.com.)

©2025 Terry Savage. Distributed by Tribune Content Agency, LLC.