Kurt Feuerman

After another big year for stocks in 2013, many investors are questioning how much longer the bull market can run before it collapses from exhaustion. This doubt has intensified with the early 2014 selloff. However, based on what we see, it’s not time to worry about the market’s stamina yet.

As the global recession and financial crisis move further back in the rearview mirror, companies have been more proactive about using their balance sheets in ways that enhance shareholder value. But we think they can do a lot more.

Under the surface of May’s strong equity returns were major shifts in sector leadership, notably a rotation from defensive to traditional cyclical sectors. Given the market’s tendency to change gears, it helps to be flexible in managing portfolio risk. In fact, it should be a daily exercise.

Upbeat headlines alone don’t make the case that US equity markets will continue plowing ahead. But we think there’s plenty of evidence that 2013 could be the fifth consecutive year that equity investors climb the “wall of worry.”

It seems that rumors of the death of long-term equity investing have been greatly exaggerated.