“Be greedy when others are fearful, and fearful when others are greedy.” Warren Buffett’s iconic advice cuts both ways, and right now, it’s the second half that demands our attention. After nearly three years of a roaring bull market— with the S&P 500 surging almost 90% since its October 2022 low—euphoria is in the air. Year-to-date in 2025 alone, the index has climbed double digits through September, marking the strongest third-year performance in decades. It’s exhilarating to watch portfolios swell, but this is precisely when discipline matters most. Recognizing the “greedy” phase isn’t about dimming the party—it’s about protecting your gains and positioning for whatever comes next. History reminds us that bull runs don’t last forever, and the smart move may be to rebalance, capture profits, and avoid the siren call of chasing even higher highs.
The Opportunity in Market Euphoria
Extended bull markets like the one we’re enjoying are gifts that keep giving—until they don’t. Assets have been inflated by optimism, innovation in tech and AI, and favorable economic tailwinds, pushing valuations to stretched levels. But here’s the silver lining: these periods are prime time for proactive steps that safeguard your long-term plan. Rebalancing your portfolio—selling some winners to buy underperformers or shift toward more conservative allocations—ensures you’re not overexposed to a single narrative. It’s like trimming the sails on a fast-moving ship to prepare for rougher seas.
Capturing profits is another key opportunity. If certain holdings have ballooned beyond your target weights, trimming them locks in real gains rather than hoping for more. Remember, no one rings a bell at the top; by the time caution feels obvious, the window may have closed. For instance, investors who methodically harvested gains during the late stages of the 1990s dot-com boom preserved capital for the eventual downturn. In today’s context, with the bull market turning three years old and showing no immediate signs of fatigue, a measured approach to profit-taking can fund future opportunities without derailing your strategy.
The Emotional Trap: Chasing the Highs
When markets are on fire, the temptation to pile in more is irresistible. “Just a little longer,” we tell ourselves, as friends boast about quick wins and headlines tout every new record. Doubling down on momentum—buying more of what’s hot or delaying rebalancing—feels empowering in the moment, like you’re outsmarting the crowd. But this greed-fueled rush is a classic pitfall that erodes wealth over time.
Overcommitting during euphoria often means buying at peak prices, setting the stage for painful reversals. When the music stops—as it inevitably does—those inflated positions can evaporate fast. Data from past bull markets shows that the average one lasts about 4.6 years with a 160% gain for the S&P 500, but the final phase is riddled with volatility that catches the overzealous off guard. Staying fully invested without adjustment might thrill you today, but it risks turning paper profits into permanent losses if a correction hits.
The Power of Staying Disciplined
What’s the playbook when others are greedy? Lean on your financial plan like never before. Rebalance regularly—at least annually—to realign with your risk tolerance and goals. If your portfolio has tilted heavily toward equities amid this tear, consider shifting some proceeds to bonds or cash equivalents. This isn’t about going defensive out of panic; it’s strategic prudence to maintain balance.
And if the urge to “do more” strikes, channel it wisely: Use captured profits to bolster underweighted areas or build a cash reserve for the next dip. This flips Buffett’s wisdom into action—being fearful means protecting what you’ve built, not abandoning the market. It’s a low-drama way to compound your success, ensuring you’re ready whether the bull charges on or takes a breather.
Turning Greed into Your Advantage
Bull markets test our humility as much as downturns test our courage. While others chase the next 10% gain, the prudent investor—the one who rebalances and captures profits—emerges stronger. This isn’t pessimism; it’s realism grounded in cycles that have played out for generations. Even as the current run shows vitality into its third year, subtle signs like recent pullbacks from record highs signal a period of reassessment.
Let’s review your portfolio together during these heady times. We can stress-test allocations, harvest gains tax-efficiently, and fine-tune for your horizon—be it retirement, legacy planning, or beyond. The goal is to celebrate the wins without courting unnecessary risks.
The Bottom Line
Warren Buffett’s full quote is a reminder that investing is as much mindset as math. With markets on a tear—up nearly 90% in three years and around 14% this year alone—it’s the moment to be fearful when others are greedy. Rebalancing and capturing profits aren’t buzzkills; they’re the moves that turn a great run into enduring wealth. Resist the FOMO, honor your plan, and let discipline be your edge. The bull may keep running, but you’ll be positioned to thrive either way.
