Since the low point of the last equity bear market – February 2009 – world stock markets have almost tripled in value. Irish investors have had the added bonus of the Euro falling in value over the same period which, in turn, has added up to 20% in currency gains on foreign investments. Huge gains no matter what way you look at things. So is this a sign of further things to come? Maybe, maybe not.

In 1929 Joe Kennedy, the father of John F Kennedy, decided to sell his stockmarket holdings after a shoeshine boy gave him some stock tips. He reckoned that when the shoeshine boys start giving you investment tips, it was time to sell.

The shoeshine boy, in truth, reflected the exuberant mood within the US at that time when everybody then thought that you couldn’t lose if you invested in the stock market. Everyone, it seemed, really believed that they could become rich. Change to a different decade, different country and a different asset type and you could have been describing the rush to buy Irish property during the Celtic Tiger.

It might seem obvious but there really is no bell that rings whenever a bull market of any asset type ends and a new bear market begins. When, however, you compare the duration of the current equity bull market to the long term average of 3 and a half years, you can get some perspective for financial planning purposes. Within that context, the current bull market of almost 6 years and 3 months is obviously far longer than the average. Incidentally, the longest bull run in the last 100 years is the one that followed the crash of 1987 and extended all the way to March 2000 which was when technology stocks then led the downturn.

One has to wonder then with the US likely to raise interest rate in the coming months as well as the possible Greek exit from the Euro is it likely that shares will continue to climb? Not only will a long bull run in equities come to an end at some stage but so too will the 30 years run in bond markets.

These days you only find a shoeshine boy (or is it man or woman?) in airports for travellers who want to look smart at the far end of their journey. To the best of my knowledge they don’t tend to give stock tips. Nevertheless, it seems like the marketing machines of investment companies are back in full swing promoting multi asset funds, risk rated funds and newer variants of tracker funds. All of them are giving the impression that now is the right time to invest and they have the right investment solution for you! And so they would. After all, their business is based around the promotion of investment funds on which they make money managing.

The bigger question that seems to be missed by investment companies, investors and many advisers is whether someone should invest at all. Not only now but anytime. In the last week I have had conversations with two separate prospective new clients which started with them telling me that that they wanted to invest all of what they had on deposit in a bank account. Following what was only a relatively short phone conversation it transpired that if they invested the funds as they intended then they actually would have no liquid assets for family emergencies such as redundancies, long term illnesses or possible needed assistance to family members. In my experience, the perspective of personal liquidity is probably the blind spot in most people’s personal financial planning.

If you plan to retire in the next few years, you may not want to be overcommitted to shares and being on cruise control immediately thereafter. Of course it is never wise to take more market risk than is necessary to help achieve your investment objectives. If, for example, your time horizon is 3 years or less irrespective of whether you have an imminent retirement or a special need arising and you are overweight in shares or high risk unit funds, you are essentially counting on this bull market to continue. The best way to manage this investment risk is not to focus on investments but rather to draw up a personal financial plan. This way you identify what income is needed to meet future intended expenditure such as capital items or normal family payments. In our own client solutions we advise clients to look beyond the moment and plan for the worst case scenario. No job, illiquid investments, no rentals from investment properties, increased interest rates and increased expenses. All of which can occur at the same time. Just remember the collapse of the Celtic Tiger.

Are our memories so short and our personal greed so great that we believe that stock market fallouts and their detrimental effects only happen to other people? The most overused phrase in investment history is that it will be different this time. Believe me, it never is!