The market has been incredibly choppy. Trying to sort out days of eight percent increases and months of 20 percent declines can be tough, but one can argue that the wind seems mostly at our backs over the longer run. The question now is how do you steer a course. There have been institutions that sailed straight with the equity wind throughout the 1990's. Large cap U.S stocks, spiced with a bit of technology, brought steady, outsized returns.
Many folks let their equity exposures ride.
In hindsight, the middle to late 1990's really weren't dangerous waters. The wind was steady and the direction clear. It's a different world in 2000 with strong gusts and shifting winds. In this environment a straight path with the wind is asking for trouble. Some angle across the wind is called for, which in investment terms means keeping track of one's equity exposure, rebalancing religiously, and seeking out equity like returns from less correlated investments like hedge funds and private capital programs.