The bull market may have strangely increased the proportion of stocks in your portfolio. If that’s the case, rebalance. Sell some high value stocks and put your money in bonds. Later, if the stock market drops, you can sell some of the bonds to buy stocks. Better yet, let a balanced fund (or target date fund) do it automatically.
Diversify with a cheap index fund.
Diversified, low-cost, broad-based index funds that reflect the overall market are a much safer way to invest in stocks and bonds than buying individual securities.
If you pick the right stock — like Apple, for example — and hold it for decades, you’ll outperform any index fund. Since 1989, the numbers show, Apple’s profits have been about 20 times larger than those of the S&P 500.
But picking and holding a stock like Apple in the first place was extremely difficult. Apple is a miserable stock throughout the 1980s and 1990s. Did you know you would stick with it when it neared bankruptcy? I’m not.
What’s more, unlike Apple, about 96 percent of stocks on the U.S. stock market don’t make money for investors in the long run, according to research by Apple Inc. Hendrik Bessembinder, a finance professor at Arizona State University. Professor Bessembinder discovered that in Global marketMost stocks won’t make you money in the long run.
Broad, low-cost index funds solve these problems. You will own slivers of the many mediocre stocks, but the winners have pulled the indexes higher, regardless.
However, there is no guarantee that you will make money from a stock fund.
After the bear market, US stocks always come back and atone for their losses. But that may not be true forever.
https://www.nytimes.com/2022/01/25/business/stocks-hold-or-sell.html How to survive when stocks behave badly