| A friend who is a bit younger than me told me that his financial advisor recommended selling his stocks in favor of bond funds because of the coming bear market. He asked me what I thought. "That's the dumbest thing I've ever heard, and you should fire them," I said emphatically. My friend was caught off-guard. "Why?" he asked. "How do they know there's going to be a bear market?" I retorted. I elaborated that even the smartest and most successful economists, bankers, investors, and traders in the world can't time the market. But this guy who cold calls people for a bank in Akron knows there's going to be a bear market? Then I asked my friend the most important question all investors should be asking themselves. "How would a bear market affect you?" Since 1900, the U.S. stock market has returned an average of 9.7% per year. That includes corrections, run-of-the-mill bear markets, and market crashes like the Great Depression, the dot-com crash, and the global financial crisis. In order to capture that nearly double-digit annual gain, it's important to stay in the market. However, if you'll need the money soon, that's a different story. I always recommend that any money you'll need within three years not be invested in the market. That's not because I think there's a bear market coming - I make the same suggestion in the middle of raging bull markets. It's because you never know what's going to happen, and if you need cash in the short to intermediate term to pay bills, it shouldn't be exposed to that much risk. | 
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