Same old bear or brand new bull? I’m afraid the answer is “Yes”

Has the stock market rally that has seen the Standard & Poor’s 500 index climb 44% off the March 9, 2009 low ended the bear market that began in October 2007?

Or is the bear still fully in charge and the recent rally merely a typical bear market rally?

Deciding what to do now with your portfolio hinges on how you answer that question. If this is a new bull market, then you should be fully invested, no? But if it’s still a bear market, it’s no time to back off the conservative, cash-heavy stance of the last 18 months.

So which is it, bull or bear?

Unfortunately, I think the answer is: “Yes.” This is both a bull and a bear market, depending on what time period you choose for your analysis. That isn’t going to make anyone looking for a simple answer happy, but, hey, sometimes reality isn’t simple and investors who want to make money just have to deal with it.

So, let me explain how a market can simultaneously be a bull and a bear and give you a strategy for coping with that ambiguous reality. Read more