Can the bull market continue? Is this a head fake? Or have investors who spent the summer so far on the sidelines missed out on the rebound and the rally?

I think these questions are good. Fear at this stage is fuel. The more people who are worried about the economy, the higher stocks can rally on resilience and relief when the worst case scenarios don’t immediately materialize.

Great investor Sir John Templeton observed that fresh bull markets tend to start when the world is still shrouded in the pessimism of the previous bear cycle. The bubble has popped. There’s no hope to spare. Everything feels miserable. People are so focused on surviving the present that they don’t spare much thought to building a better future.

That’s where the market mood was until recently. Maybe that’s where it still is for you. That’s okay. Stocks make a lot of shocking leaps when the gloom is still heavy . . . 34% of the biggest single-day gains come in the first two months of a baby bull cycle.

From there, the mood shifts to skepticism. We see the gains but have a hard time believing that they’re real. Maybe that’s where you are. That’s where I am. But we’re scoring solid gains between the waves of Wall Street second guessing itself.

My current GameChangers portfolio, for example, started last earnings season (1Q23) falling about 4.5% as big names like Netflix and Tesla pulled the market down. (Sound familiar?) It felt like another head fake at first. But as the season evolved, it turned out that Netflix and Tesla were the outliers. Our relatively small stocks were the actual “green shoots” thriving even in this tough economic environment.

The broad market struggled to keep earnings from free fall. Our stocks proved that they’re still growing. They ended that earnings season up 38.8% in the aggregate from where they were when it started. That’s not a misprint.

We can have a hard time believing that those gains are real. That’s skepticism. But so far, nothing suggests that our recent progress is going to evaporate without some clear shock or disappointment.

And why I’m able to overcome my skepticism and even get a little cautiously optimistic is that early bull markets are statistically more lucrative than late stages. We’re still in the first or maybe the second inning if you count this bull as starting in mid-June.

The first month is over. Usually that one does OK for investors with conviction, earning about 13% on average. Then the next two months of the cycle basically double that initial giddy return. If this game plays out like it has in the past, that’s exactly where we are now.

In the long run, it takes the S&P 500 a typical YEAR to rally 10-11%. The chance to do that in the current 60-day period is pretty irresistible. Seasons like that are a big part of my whole rationale for staying in the market in the first place!

So if you miss this season, you miss the initial giddy surge. I don’t care that it’s summer or that back to school is coming or that the market gets a little seasonally vulnerable in September and October. It’s July now and we’re in that first rebound rush period. You snooze, you lose.

Statistically the second quarter (months 4-6) of a bull market only delivers an average gain of 2% . . . there’s a natural slowdown, a pause for the skeptics to test the rally before embracing the reality before their eyes. But even that “slow” season is worth it if you have any kind of fear of missing out because holding on saves you your seat for months 7-16, which have historically unlocked about 3.5 percentage points a month, the equivalent of 42% a year.

That’s speed. And I have to admit that even my beloved GameChangers are only earning profit at an annualized rate of 39% a year so far. We’re beating the S&P 500 by about 28% a year but we’re only getting started. The really great times are just over the horizon. And that’s just GameChangers. I’ve got other portfolios. You can see them all if you just click this link.

But Hilary what if there’s a recession? The bulls tend to get running before government economists manage to even call the contraction . . . and those who don’t want to be in the market in a downturn lose out.

Look at the Great Recession, the infamous 2008 crash that still has so many investors looking under the bed for monsters. It officially ended in June 2009. The government let us know in September 2010, which means that if you were waiting for the all clear, you spent 15 months of your life in limbo.

The bulls started running in March 2009 . . . three months before the recession even ended and a full year and a half before the government informed us of that fact. Not jumping back in when the bear market was over would have cost you a 65% profit . . . about 3.6% a month, exactly what the numbers I’ve discussed above suggest.

Can you afford to give up 3.6% a month right now or even delay a week or two? That “all clear” announcement might not be coming for months or even years. Meanwhile, in the absence of a recession, brave investors are making money. Why not you?