If a Stock Market Crash Is Coming, History Says This Strategy Can Cut Your Portfolio’s Recovery Time in Half
The last few years have been absolutely fantastic for stock investors. The bull market of the last four years has pushed the S&P 500 (SNPINDEX: ^GSPC) 116% higher while the tech-heavy Nasdaq Composite (NASDAQINDEX: ^IXIC) is up an even more impressive 156%.
While the bull market has been strong and supported by stellar earnings growth and improving outlooks, many investors can’t help but notice that stock market valuations are particularly high. That’s not a sustainable position for stocks: Either earnings have to grow fast enough to bring valuations lower, or stock prices have to come down.
In fact, it’s a practical inevitability that stock prices crash 20% or more in the future. The markets move in cycles, and eventually, some event will trigger a big sell-off in the stock market. If you want to position your portfolio to recover in less than half the time it takes for others, here’s exactly what you should do.
Source: www.fool.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.