The current bull market, often referred to as the Roaring 2020s, is a phenomenon that has captivated investors worldwide. It's a period characterized by unprecedented stock market growth, with Canadian and U.S. equity benchmarks soaring by approximately 140% since late 2019. This surge is particularly remarkable when compared to the historic bull market from 1982 to 2000, which saw 20% annual returns for nearly two decades. What makes this current market so intriguing is the contrast between its robust performance and the global chaos that has unfolded in recent years, from the pandemic to the energy crisis. Personally, I find it fascinating how the market has managed to thrive amidst such turmoil, and I believe it's a testament to the resilience and optimism of investors. However, I also recognize the fear and uncertainty that many people feel, especially those who have been on the sidelines, watching the market's ascent with a mix of awe and trepidation. The retail investor experience has often been defined by missed opportunities, as highlighted by U.S. research firm Dalbar. Their findings reveal that the average American equity-fund investor has sacrificed about a quarter of the returns the S&P 500 generated over the past decade. This statistic is a stark reminder of the importance of staying invested during bull markets. Leaning in doesn't necessarily mean taking excessive risks, but it does require investors to maintain their stock market exposure at a level that aligns with their long-term goals. For those with an investing horizon of about seven years or longer, an aggressive approach can be justified. One of the most effective ways to do this is by adopting a passive investing strategy, such as investing in a major index fund and ignoring the market noise. This approach, often referred to as "VOO and chill," has become synonymous with a minimalist buy-and-hold mantra. For Canadian investors, the iShares Core Equity ETF Portfolio is a suitable alternative. The key to success with this strategy is to keep investment fees as low as possible and to ignore the news. This allows the magic of compounding to work its wonders while other investors argue about timing. However, few Canadian investors choose this route. Passively managed stock funds have a market share of just 23% in Canada, according to a PWL Capital report. Most investor money sits in funds that try to beat the market by picking individual stocks, despite the fact that the vast majority fail to do so and charge fees that are more than quadruple their passive equivalents. Another challenge for investors is enduring sell-offs, which have been a regular occurrence since 2009. These corrections can be emotionally taxing, as investors watch their nest eggs shrink in real time. However, history has shown that enduring these corrections when instincts are telling us to retreat is usually rewarded handsomely. Investors who succumb to panic then face the very difficult decision of when to get back in. The fear of missing out on the market's ascent can be overwhelming, but it's important to remember that record-highs are usually a good sign. Research has shown that money invested at market peaks does just as well over the long term as money invested at any other time. In fact, not being in the market is likely to cost you. So, how can investors make the most of this bull market while it lasts? The answer is simple: lean in and stay invested. Don't let fear get in the way of participating in a bull market for the ages. By adopting a passive investing strategy and ignoring the market noise, investors can capture as much of the bull market as possible, no matter what. In my opinion, the current bull market is a once-in-a-lifetime opportunity for investors to build wealth and secure their financial future. It's a time to embrace the magic of compounding and to ignore the fear and uncertainty that often plagues the market. So, if you're on the sidelines, now is the time to get in and make the most of this historic bull market.
