Chasing dividends and gains in markets that are moving sideways is a real risk that could lead to losses instead of profits.
The FTSE 100 has technically been a bull market since sinking to a low of 3,500 in March 2009.
Investors that know their bulls from their bears will realise prices are going up and the market has seen a rise of at least 20%.
That makes the stampede for profits officially a bull and sooner or later a fall is on the way that will plunge the market into a bear.
The traditional strategy is to buy as a bear and sell as a bull to make gains.
Recognising the point of no return
That depends on recognising when markets are on the turn and where they sit in the cycle.
The days of the current FTSE bull look numbered.
The current bull is more than seven years old and almost the longest bull since the Second World War and fast approaching the 97 months that ended in the Wall Street Crash and the 117-month bull when the dotcom bubble burst in 2000.
Looking at the stats for other bulls since the 1940s, 10 slumped in to bears and three carried on to reach new heights.
Spotting the point when a bull turns into a bear is a skill few possess.
When the market is teetering on the edge, the touch of a feather could be enough to send stocks hurtling towards oblivion.
Staring a bull in the face
Some important geopolitical factors are playing out this year.
- The FTSE is braced for the Brexit vote on June 23. Which way Britain jumps will affect the markets and hit the FTSE most of all.
- The US Presidential Election in November could see the advent of Trumponomics if Donald Trump sweeps home on the republican wave
- Oil and commodity prices are continuing to have a downward pull on inflation, muting demand and stunting economic growth
- The US Federal Reserve is thinking about increasing interest rates in June and possibly again later in the year, which will strengthen the dollar even more against weaker currencies
The challenge for investors is holding their nerve and resisting the temptation to buy in a bull and sell in a bear.
