Tom Lee is the new hero, but remember what happened to Cathie Wood in the same situation?
If you have been investing for a few decades, you already know the market spends a lot of years drifting higher. That slow upward tide is exactly what makes the messages of Wall Street, the big advisory firms, and the most televised gurus feel so comforting to hear, watch and follow. Prices are up, sentiment is bright, and the loudest voices are usually the ones saying stay the course, everything looks fine, this is the time to be long.
And that's exactly how countless self-directed traders and investors end up carrying far more risk than they realize — until it's too late.
I have watched (and been part of) this cycle repeat over and over since 1997 when I first started trading my own money. A new voice rises to hero status in the media after predicting few market trends and moves, the crowd follows, and portfolios load up on the same trade at the same time. When it works, it feels like guidance and skill. When it stops working, it looks like a decade of savings evaporating in a few brutal months and that there was no strategy other than buy something – period.
If you want a sobering take on media and free opinions, then read this article "Why Free Market Analysis Can Cost You More Than You Think."
This article is about why that happens, how it keeps happening, and what a different path and strategy looks like when you stop predicting and start following price, and protecting portfolio positions.
The Seduction Of Up Years & Perma Bulls
In many calendar years, the stock market finishes green. That simple fact becomes the foundation for a lot of advice that sounds safe. Stay invested, ride it out, time in the market, not timing the market. Those slogans are easy to remember, they feel wise, and they are great at keeping people in their seats when the orchestra is still playing.
But slogans are not risk management. Up years lull investors into believing they own a safety net. Then a garden-variety pullback arrives, and no one knows if it is the beginning of a routine pause or the opening act of a major bear market. Without a plan that follows price and adapts, the default response becomes hope. Hope is not a rule, and it is not a defense.
I wrote in depth about this and how even smart investors blow up eventually in a bull market.
Media Heroes, Momentum Stories, and Herding Effect
Every cycle has marquee names that capture attention and shape behavior. During the 2020 to 2021 growth boom, Cathie Wood's ARK Innovation ETF became the emblem of high beta innovation, surging 152.8% in 2020, then slipping 23.38% in 2021, and falling 66.97% in 2022 as conditions flipped. By late 2022 the fund's drawdown exceeded 75%, a stark reminder of how quickly momentum can reverse when the regime changes. Morningstar data cited by the Financial Times later labeled ARK the "biggest wealth destroyer of the past decade."
Today, a different confident voice is front and center. Strategist Tom Lee of Fundstrat is widely covered for consistently bullish market views and high long-term targets, and he earned a lot of airtime with optimistic calls through 2023 and 2024. That optimism resonates in rising markets as it's what investors want to hear. But investors still need a plan for when the market turns down.
Media rewards conviction, and audiences love a clean directional call. That incentive structure pulls public commentary toward always-bullish, buy and hold, stay the course messages. It gets clicks, it feels good, and it keeps money in the market, and inside financial products.
This is pretty much how all Wall St. money managers run their businesses. And it's just a matter of time before their long only, perma-bull outlooks and strategies fail and they go from hero, to hated status. Every major bull run produces a new financial hero who leads the charge — until that same confidence leads investors straight into their next account-destroying downturn. I have seen this happen repeatedly over the past 25+ years and it will continue to happen unfortunately.
When The Music Stops, Slogans Do Not Protect You
The buy and hold messages that feel reassuring in uptrends keep you fully exposed in downtrends, they do not tell you when to reduce risk, how much to sell, or when to step aside into cash. They do not tell you what to own if stocks and bonds fall together. For an investor in, or near, retirement, that is not a plan, it is an open invitation to sequence-of-returns risk.
A 30 percent drawdown on a 1,000,000 dollar nest egg is 300,000 dollars gone, and it takes about 43 percent just to get back to even. A 50 percent loss requires a full 100 percent gain to climb out. Those are not academic numbers, that is a canceled retirement date, a downgraded lifestyle, and years spent repairing instead of compounding. A TV soundbite is not a buy or sell signal, just as hope is not a hedge, risk management or a strategy.
When the "All Weather Portfolio" Stops Working
Even sophisticated frameworks can grow complacent when a single macro trend lasts decades. For the last 40 years, falling rates helped bonds cushion stock drawdowns. In 2022 that assumption broke. Both stocks and bonds fell together, and a classic 60/40 portfolio declined about 25%, one of its worst years on record. Long-duration Treasuries finished roughly 30% lower, and even intermediate bonds dropped around 10%, which is exactly the environment traditional stock-bond diversification was meant to offset.
Risk parity strategies, including high-profile "all weather" style allocations, faced the same headwind as correlations flipped. Industry analyses flagged 2022 as a notably difficult year for risk parity, and independent research on Bridgewater's and Ray Dalio's All Weather fund reports a loss of about 22% that year, underscoring how a bond shock can ripple through models built on long-standing relationships. The takeaway is not that diversification is dead, but that static allocations can struggle when the regime changes.
The lesson is simple and humbling. Long streaks breed assumptions, assumptions become blind spots, and blind spots turn into losses when conditions flip. A rules-based, price-driven approach does not assume, it observes, measures, and adapts.
Buy And Hold Sounds Wise, But It Hurts In Real Life
Buy and hold is clean on a chart, messy in a household. A 30 to 50 percent portfolio drawdown is not just a number, it is canceled travel, delayed retirement, and a spouse asking why there was no plan. Many investors in their 50s and 60s have lived this more than once. They do not need another pep talk. They need a framework that treats every correction as if it could be the start of something bigger, then let price prove otherwise.
What Asset Revesting Does Differently
Asset Revesting is what I believe is the most efficient and safest way to invest. It's been used since 2001 and is in a category of its own in the investment world. When using it, I do not predict, I do not call tops, and I do not try to nail bottoms. It allows me to follow price, I position with strength, and I manage risk as if the next pullback could be the first step of the next bear market. That posture is not fear, it is discipline. It is also how members sidestep the disasters that ruin compounding.
Here is the heart of it, stated plainly.
Risk first, returns second. Many investors focus on what they might make, Asset Revesting focuses first on what could be lost if a move fails.
Follow, do not forecast. Positions are taken after strength is confirmed, not when a story sounds exciting. Positions are reduced or exited when price deteriorates, not when a talking head changes a narrative.
Be willing to go to cash. Cash is a position. Patience pays dividends, literally and emotionally, while the next high probability setup forms.
Profit from declines when conditions warrant. When downtrends are in force, the playbook includes assets and structures that can rise while stocks fall. No dramatics, just rules.
A Different Conversation For Investors 50+
If you are 50 plus, you are not trying to win a trading contest. You want clarity, control, and calm. You want to grow without giving back years, and you want someone to take the emotion out of the decisions that matter.
I hear versions of these stories every week.
Mike, 63, manufacturing executive, spent two bull markets believing he had it figured out, then watched a third of his savings disappear, twice. He told me, I do not need the thrill of a perfect bottom, I need a process that keeps me off the rocks. Once he embraced exits as a sign of strength, not weakness, his blood pressure and his drawdowns both came down.
Karen, 58, small business owner, tried to do everything herself. She took two courses, subscribed to three investing newsletter, and still made reactive decisions based on headlines. Her turning point was not a magic indicator. It was a checklist that guided her and said, enter only after strength, reduce when momentum fades, step aside when trend structure breaks. She calls it boring in the best possible way allowing her to free up time and sleep better at night.
These are not promises, they are patterns. Investors who trade narratives ride the mood of the crowd. Investors who follow price accept small, controlled inconveniences to avoid big, life-changing setbacks.
The Hidden Cost Of Perma-Bull Messaging
Always-bullish narratives feel optimistic, and optimism is attractive. That is why advisors and asset gatherers repeat it. Their business model rewards assets staying put. But optimism without an exit rule is not a strategy, it is a slogan. For investors 50 plus, permanent bullishness is a ticking time bomb, because sequence-of-returns risk turns a routine drawdown into a smaller lifestyle, delayed retirement, and years spent repairing instead of compounding.
When markets finally trend down, the only tools left in the perma-bull playbook are phrases designed to keep clients from leaving.
By contrast, the mindset I wrote about in my recent piece, "Why Being Called a Perma Bear Is the Best Compliment I Could Get," is not about shorting everything or sitting in cash forever. It is about being permanently prepared, not permanently negative. Perma-bear thinking keeps risk top of mind, follows price, stays long while strength persists, reduces or steps aside when deterioration appears, and is willing to profit from declines when downtrends are in force. That posture protects capital first and lets growth compound second, which is the only order that works across full cycles.
How I Decide, Without Guessing
People ask me, "What do you look at if you are not predicting". The answer is simple, and it is the same across stocks, sectors, commodities, currencies, and bonds.
Trend structure, is the sequence of highs and lows advancing or deteriorating.
Momentum behavior, is impulse expanding or stalling.
Relative strength, is this asset leading or lagging better alternatives.
Risk parameters, are position size and exit levels aligned with current volatility.
None of this requires a forecast. It requires acceptance. I accept that any pullback can become a bear market, so I react to deterioration early. I accept that any breakout can fail, so I size for that reality. I accept that my opinions are irrelevant next to the price, so I trade the price.
What This Means For The Next Downturn
Another major correction will come. No one knows the day. What matters is how much of your savings is exposed when it starts, and how quickly your process can get defensive and stay disciplined while others rationalize. In general, when investors follow price with defined exits, drawdowns stay small enough that new opportunities can be taken without fear. When investors ride out declines because a slogan told them to, recovery becomes the plan, not growth.
So Now What?
If you are wondering what to do next, I can share something that I do with my own money, which you too can do that can protect and grow your account at the same time, and is nearly unheard of in the financial world.
It's a method of investing called Asset Revesting. I wrote a book on this and it exists to close that gap with a rules-based, risk-first, price-driven approach that adapts to the current market environment, up, sideways, and down. It is not about beating every rally. It is about keeping what you make, allows you to compound your growth multiple times each year, avoid corrections, crashes and bear markets, so you can relax, sleep better, and actually keep the gains you've worked hard to earn — without large downside risk.
Concluding Thoughts: For The Seasoned Investor Who Is Worried And Needs Help With Protection & Growth
You have already lived through enough cycles to know how this movie ends when there is no plan. You do not need a new guru, you do not need a bolder prediction, you do not need a slogan. You need a process that is humble enough to follow price and firm enough to protect you when it matters.
That is what I do, every day, for myself and for the investors who choose to follow along. I share my Adaptive Compounding Strategy (ACS) with a select group of investors.
Stay logical, stay calm, stay protected.
