I read an overwhelimg number of articles on SeekingAlpha that frantically urge readers to bail from this market. Of course, a majority of these articles are by disgruntled bears who did not participate in the rally and want this rally to fail. Like they say misery loves company and bears are all for this rally to end. Some bears have a selfish interest and they want the market to retrace so that they could get on board. This brings forth the question "When should you bail?"
I will tell you my answer. My short term portfolio is purely trend driven. When I see a bend at the end I bail from the short term portfolio. I move in to cash and wait for an opportunity to get back in and recycle the money for more profits. However with my long term portfolio I have set my stop losses quite low (an equity has to break 3 levels of support before it can get stop lossed) and if an equity does hit the stop loss it probably means we are toast! In the past several weeks I have seen many equities test one and even two levels of support before bouncing back and continuing on with the rally. Had I set the stop loss at the first or even the second support level I would have been out of several equities that have rallied quite decently in the past several weeks. The bottomline -- while every metric and chart tells me that this rally will continue for a good amount of time I am prepared for the worst by using a well designed stop loss strategy. Also on a weekly basis I examine equities in my portfolio to see if any of them have developed Sell signals not just on their daily charts but also on their weekly charts and if so I bail from them. So "Buy and hold" does not mean that you just buy and hold but you are vigilant in guarding your portfolio and making the appropriate changes that are necessary. This is what investing has come to (unfortunately!) - you can't even buy the best of the breed and take it for granted that several years down the road they would have appreciated to higher levels. You have to keep vigil at least on a weekly basis. This strategy has worked wonders and I am comfortably in double digit gains across all my portfolios and can sleep well at night!