Women aspiring to run the Boston marathon train to meet a qualifying standard.  Before 1972, they had to do so much more.  Barred from entering, they often cross-dressed for the interloping occasion with fake mustaches, capped heads, and compressed chests. Distance running was considered unsafe for females.   It wasn’t until 1984 that the first women’s marathon was held at the Olympic Games. 

Fortunately, we evolve.  Outdated ideas of female frailty now make most of us cringe.  And one day, I hope, most people will wince when the stock market rises.

Like mustaches, bull markets are fine— for some.  They’re a near-retiree’s hope and a pensioner’s panacea.  But the vast majority of Americans are nowhere near retirement age.  According to the Census Bureau, only 13 percent of Americans are 65 or older.

Falling or stagnating stock prices are better for everyone else.  Our savings buy greater proportions of businesses when stock prices are flat or down.  Dividend yields are higher when prices slump, and dividend reinvestments get juiced during market markdowns. 

Headlines reading “Investors Gain As Dow Surges” are as logical as hearing “Americans Celebrate as Miami Heat Wins.” As popular as LeBron James may be, he doesn’t play for everybody’s home team.

Although my view may seem weird to some, I take comfort in not being entirely alone. Jason Zweig wrote a “news report” reflecting how most people should view the markets in his update of Benjamin Graham’s classic book, The Intelligent Investor. It reads something like this:

“Investors gained today as the Dow plunged 300 points.  Microsoft and Coca Cola pleased investors by leading the discount.  ‘We’re hoping for further falls next week’ says RBC analyst Johnny Logic.”

 Two hundred years of history reveal that global stock markets, on aggregate, always rise.  Not every year.  Not every decade.  But like the rubber ducks you once frolicked with in the bath, they won’t stay down forever—regardless of whether your brother’s posterior is wedged on top.

As of July 16, 2013 the U.S. market, as measured by Vanguard’s total stock market index, has risen 64 percent in just three years.

As a 43 year old, I’m disappointed. Had prices stayed down longer, I would have been able to buy more. If you’re at least five years from retirement age, you should be disappointed, too.  Does this mean you should sell?  No.  That’s not investing, it’s speculating.  Instead, like a gutsy pioneer female runner, take the road less traveled.

If you’re building a cheap, diversified portfolio, such as what I recommended in my book, Millionaire Teacher, add money to bonds this month.  Here’s an example.  Assume that you own three indexes: one for international stocks, a second for U.S. stocks and a third in government bonds.  Rebalance the portfolio, not by selling anything but through selected purchases.  Doing so helps to keep the portfolio balanced. 

Stick closely to your goal allocation by purchasing the lagging index each month.  Such an approach sounds easy, but it’s about as comfortable as running with a corset.  You’ll be buying what others shun.   Note the one-month Morningstar chart below:

Morningstar Chart

If your holdings met your allocation goal one month ago, and you owned Vanguard’s broad market indexes, you could buy the bond market index (down 2.3 percent for the month).  Instead of listening to expert forecasts, ignore them.  Long term, you’ll make much more money than most market watchers.

Falling prices for stocks and bonds are good for most investors.  Embrace declines, run from bubbles. And avoid headlines—until, of course, they reflect the interests of the majority, and not the few.