Investing.com - Investors unnerved by the market correction and now worried about the possibility of a bear market may be tempted to sell while stock prices are still high, but they may wind up regretting that decision to try to time the market.
History shows the final year of a bull market is marked by some of the strongest gains, according to an analysis by the Wells Fargo (NYSE:WFC) Investment Institute.
Large-cap stocks gain an average of about 24% in the 12 months before the bear market sets in, while small-cap stocks gain even more -- about 36%.
Such gains, which are usually greater than the two prior years, are typically driven by investors afraid of missing out on the bull market.
Wells Fargo advises "investors should consider maintaining full equity exposure" because "U.S. economic data supports the case for continued economic recovery and further stock market gains."
Stock prices have been unusually volatile since an early February correction knocked more than 10% off the major averages.
Wells Fargo is one of the few Wall Street firms to raise its S&P 500 year-end forecast after the correction. It's 2,950 price target is about 3% higher than the market's January peak.