Stock market: Guard against too much confidence in Russell 2000 high
The nine-year stretch of rising stock prices won’t last forever. So now’s a good time for investors to bear-proof their 401(k)s before the next financial storm. USA TODAY Guarding against irrational exuberance is critical right now. That’s because the stock market’s strong recovery from its early February drop has fooled investors into thinking the bull market is invincible. It’s true the bounce-back has pushed several market averages to new all-time highs, notably the NASDAQ Composite and the Russell 2000 index. To be sure, the large-cap dominated Standard & Poor’s 500 is not back to its January high, even though it has recovered nearly half of its losses from the early-year “correction,” or drop of 10%. This revival has encouraged investors to take on too much risk. They will regret it the next time the market declines. And, sooner or late, it inevitably declines. Irrational exuberance, a phrase that has come to mean out-of-control prices for stocks, is on full disp...