If you think back to the end of 2011, were you thinking about calling your broker? I don’t mean calling her about your excitement regarding Prince William’s marriage to Kate Middleton.

I mean to ask her why you owned stocks when over the prior 30 years, bonds had done better. Why did you take on risk? This decade answered that question.

Last year was a great year for both stocks and bonds, but during the past decade, stocks had their fourth-best decade return while bonds had their fifth-worst. Think about the big picture rather than getting lost in the numbers. The first 10 years of this century were not gentle for those taking on risk. I am sure you know some who were so affected that they swore off these investments forever.

The past 10 years have been great for stocks, even though things were not so great at the start of 2010. The United States was working its way out of what was close to a depression. Unemployment hovered around 10%, people were bringing checks to the closings of the sales of their underwater homes.

Well, things have certainly changed. And they will inevitably change again.

If you are now enthusiastically in the stock camp, brandishing your brokerage statements to anyone who wishes to look at them, let’s pause. If you step back and take a breath, do you think that the next 10 years will be better, worse, or just about the same for stocks?

In the near term, markets may stay strong. The Federal Reserve lowered interest rates and appears to be disinclined to raise them, markets tend to do well in election years (although a 37% drop in 2008 is not an insignificant exception), corporate earnings are still rolling along, and inflation is a distant memory.

But rather than have a glass half-full attitude toward the markets, you may want to have several glasses and change their amounts based on how much has been drunk to date. As growth stocks continue their ascent, think about drinking less of them and start imbibing more of value stocks. As U.S. stocks climb, sip a bit more on international. And if 10-year Treasuries start to pay more than 2% again, ask for a bit of a top off with them.

Don’t allow the most recent movements to set your future expectations. The next decade’s returns may come from the laggards of the past 10 years.

If you are thinking of calling your broker, don’t do so just to talk about Harry and Meghan. Ask whether he or she thinks any changes are appropriate.

Spend your life wisely.


Ross Levin is the chief executive and founder of Accredited Investors Wealth Management in Edina.