The good news for investors just keeps coming – -and neither political machinations, the fear of a world-wide epidemic, nor warnings from seasoned investment pros have taken a toll. Yet. The stock market has reached new records in recent days. And investors also have record amounts in their retirement accounts.

That’s the latest word from Fidelity, which is the country’s largest IRA and 40l(k) plan provider and record-keeper. In all those accounts, the balances have increased to record levels at year-end 2019. In fact, these retirement plans are literally coining millionaires! On Fidelity’s books, there are now 233,000 40l(k) millionaires, and 208,000 IRA millionaires.

Even those “average” investors have increased their personal wealth dramatically. See how you compare to the Fidelity statistics:

• The average 40l(k) balance rose to a record $112,300 – a 17 percent year-over-year increase.
• The average IRA balance also rose to a record $115,400, up 17 percent from a year ago.
• The average 403(b) plan balance was up 18 percent to $93,100.

Clearly, stock market participants have done well since the stock market “bottom” around Dow 6700 in Spring, 2009. Those who weren’t scared out in the panic, and kept contributing automatically, found their regular monthly investment amount purchased more fund shares at those lower prices. Then, as the market soared over the following 11 years, their account values grew dramatically.

That performance didn’t take investment genius. Most of those accounts were invested in index funds that tracked overall market performance, or in stock funds that also reflected overall market gains. And that’s the way it is supposed to work – over the long run.

I never tire of reminding investors that over the long run — at least 20 years – a diversified portfolio of large-company American stocks, with dividends reinvested, will come out ahead – even adjusted for inflation.

That’s the conclusion of the Ibbotson market historians who analyzed every 20-year period going back to 1926, and found no losing 20-year period, if you include reinvested dividends (which account for about 40 percent of the total return).

So if you have a lot of 20-year periods ahead of you, the smart move is to keep contributing to your retirement plan, stay diversified, and have the discipline to ride out the ups and downs that will surely come your way.

But What if You’re Close to Retirement?

That is the multi-trillion dollar question. It’s never easy to maintain the discipline to keep investing in a bear market. But it is especially difficult – and very dangerous – to take that position if you’re on the edge of, or already into, your retirement years.

The reason is simple. Time is no longer on your side! You need that money to live on during retirement. You will be required to take out cash every year – now starting at age 72. So you might even be forced to sell stocks at a time when the market is making lows, if you haven’t set aside some money for withdrawals inside your retirement account.

If you’re in this category, this is the time for “risk management” not market timing. No one knows when this market will stage a bear retreat, or what might trigger it. But you’ll surely know a bear market from that sickening feeling in the pit of your stomach when your account balance declines dramatically.

Money is fuel for stocks.

And there is plenty of money moving stock markets these days. We’ve had a decade of global central banks creating “liquidity” to keep their economies from stagnating. And much of that liquidity has found its way into the U.S. stock market.

In recent weeks, China joined that trend – creating $1.7 trillion in yuan ($243 billion in U.S. dollars) to keep the Chinese economy afloat as the Coronavirus closed plants and shut down commerce.

Like water, money seeks its own level. And it flows easiest into liquid markets that are perceived to be safe and well-regulated. When the Chinese announced their plan recently, the U.S. stock market rallied.

No one can predict how long the stock market rise will continue, or when the plug will be pulled with wealth flowing down the drain.

An old saying comes to mind: “The bigger they come, the harder they fall.” And that’s The Savage Truth.