Investors Urged to Cut Risk After S&P 500 Posts 3 Straight Double-Digit Years
Updated
Updated · Kiplinger's Personal Finance · Aug 17
Investors Urged to Cut Risk After S&P 500 Posts 3 Straight Double-Digit Years
3 articles · Updated · Kiplinger's Personal Finance · Aug 17
Summary
Three consecutive double-digit S&P 500 gains from 2023 through 2025 are prompting advisers to tell investors—especially those nearing retirement—to reassess portfolios and potentially trim risk.
The warning centers on recency bias: strong recent returns can make investors assume gains will continue, even though such three-year streaks have been rare since 1926 and do not guarantee another up year.
Near retirement, risk capacity often shrinks even if risk tolerance rises, because losses during the five years before and first five years after retirement can do outsized damage while withdrawals are underway.
Advisers are not calling for a full exit from stocks; they recommend keeping some growth exposure against inflation while shifting the focus from maximizing upside to protecting accumulated gains.