The S&P 500 first hit 2,100 in February 2015. That's exactly where it trades as I write this. So, dividends aside, we've already seen about 16 months of an ultimately flat index.
One never knows, but another year or more stuck in the mud wouldn't be surprising, given today's market valuation and relatively slow economic growth around the world -- both against a backdrop of other challenges and uncertainties. True, challenges and uncertainties are always present, and the market has been the greatest wealth generator in the world despite that, but today's situation still merits reasonably muted expectations regarding the broader market.
That doesn't mean opportunities to win (and lose!) big don't exist for investors choosing individual stocks. That's always the case. And as options investors, we have more ways to win than not, even in a flat market. We just need to be as careful as ever and possibly more defensive than usual, and ensure we take our time to make clear decisions. At home, you should:
- Maintain a portfolio of long-term stocks you're legitimately excited to own
- Use options as a complement to generate additional returns, including gains if stocks go nowhere