The bull market may have inflated the proportion of stocks in your portfolio outrageously. If so, rebalance. Sell ​​high-value stocks and invest the money in bonds. Later, if the stock market drops, you can sell bonds to buy stocks. Better yet, let a balanced fund (or target date fund) do it automatically.

Diversify with cheap index funds.

Diversified, low-cost, broad-based index funds that reflect the entire market are a much safer way to invest in stocks and bonds than buying individual securities.

If you pick the right stock – say Apple – and hold it for decades, you’ll outperform any index fund. Since 1989, the numbers show, Apple’s returns have been around 20 times that of the S&P 500.

But choosing and owning a stock like Apple from the start is extremely difficult. Apple was a miserable stock for much of the 1980s and 1990s. Would you have known how to stick with it when it was on the verge of bankruptcy? I do not have.

Also, unlike Apple, about 96% of stocks in the U.S. stock market pay investors nothing over long periods of time, according to research by Hendrik Bessembinder, a finance professor at Arizona State University. Professor Bessembinder has since found that in global markets too, most stocks won’t make you money in the long run.

Broad, low-cost index funds solve these problems. You’ll own small chunks of a lot of mediocre stocks, but the winners have pulled the indices up, regardless.

However, none of this guarantees that you will make money in stock funds.

After the bear markets, US stocks have always come back and redeemed their losses. But that might not be true forever.