Now comes the hard part. If you are worried about more volatility ahead or that your portfolio has drifted too far for its target allocations, it may be time to rebalance.
Rebalancing is the sometimes painful process of selling assets that have appreciated and buying ones that have fallen in value. It forces investors to sell high and buy low. That can be especially hard to do when enthusiasm is high.
"It's virtually impossible to get investors to rebalance to a more conservative portfolio at the peak of a true bubble," said Ryan Poage, a CFP in Kansas City, Missouri. "The next bubble won't be using the price-to-eyeballs ratio like dot-coms used when the Dow hit 10,000, but there will be some other silly measure used to justify paying foolish prices."
Rotblut of the AAII recommends investors be systematic about their approach to rebalancing. He reviews his portfolio twice a year and rebalances if assets have gone 5 percent above or 5 percent below their target allocations.
"I wouldn't rebalance just because the market is hitting a milestone," Rotblut said. "However, given how much stocks have risen since the election, I think it's OK for investors to do it before the year ends."
Correction: This story was revised to clarify that the Dow is approaching 20,000.