As is always the case, and being that there must exist a seller for every buyer (and vice versa), there are presently bullish and bearish cases to be made for the stock market going forward. And they all make some sense.

Here are some things that traders (I distinguish from investors), who are long stocks (own them), should be worrying about:

• The current bull market, while not the longest ever, has run longer than the average. 
• Margin debt (loans against portfolios), is historically high. A correction could spark margin calls (happens when an account’s equity drops below the allowed threshold, requiring that the loan be paid off), which could—assuming the loans are mostly against equity portfolios—require lots of correction-exacerbating selling.
• The potential for bonds to sell off more than expected (pushing interest rates higher than expected) as QE winds down and tightening (the Fed raising short-term interest rates) appears on the horizon.
• Some geopolitical event(s) raising doubt about the global economic recovery.
• China’s economy showing signs of further weakness.
• The major averages dipping below technical support levels, sparking sell-offs among chart-watchers.
• Continued reluctance by corporations to invest their huge cash troves.
• A strong pick up in overall bullishness. Per John Templeton, “bull markets die on euphoria.”
• Certain sectors (consumer discretionary, healthcare and staples, for example) and styles (smallcap growth, for example) are showing signs of relative frothiness (valuations are high relative to other sectors/styles).

And here’s what traders ought to be feeling good about:

• Valuations in the U.S., while not cheap, are relatively reasonable.
• Corporate balance sheets are, by and large, in decent shape.
• Relatively calm political environment in the U.S.
• Valuations in Europe are attractive.
• Emerging markets stocks are very cheap.
• Still lots of naysayers. Per John Templeton, “bull markets grow on skepticism.”
• The individual investor has yet to rush in. Which tends to coincide with market euphoria.
• The anticipated pick up in job/economy-boosting capital expenditures (businesses expanding).
• The major averages have reached all time highs, however, the economy has yet to achieve anywhere near a typical post-recession rate of growth. If indeed economic growth is to revert to the post-recession mean—given today’s reasonable valuations—the market remains in decent shape.
• Certain sectors (financials and energy, for example) and styles (large cap value, for example) remain relatively attractive.

Note: Sectors not mentioned in either case, remain, by my calculations,  reasonably valued.

So why, given that I presume my readers are long-term investors—as opposed to short-term traders—do I present the things short-term traders can feel bad or good about? Because that’s the stuff the financial media will focus on as the year unfolds. And I will no doubt be here and there commenting on most, if not all, of the above going forward.

And of course, beyond making sense of all the noise, I will forever remind you of the stuff that matters to successful long-term investors. Stuff like:

• Remaining agnostic on the market, short-term. I.e., you’re not committed to a bullish or bearish scenario. Nor do you concern yourself with volatility.
• The importance of maintaining a broad, and globally, diversified mix of assets.
• The importance of maintaining a mix that is consistent with your temperament (a mix that won’t incite panic [and selling] during the inevitable bear market), and your time horizon (generally, the older you get the less exposure you have to stocks).
• A willingness to periodically rebalance your portfolio (selling when stocks are rising, and buying when they’re falling).
• Knowing that attempting to time the ups and downs of the market is a fools game.
• And, above all, having faith in the future: That is, believing my currently favorite Adam Smith quote:

“The natural effort of every individual to better his own condition is so powerful that it is alone, and without any assistance, not only capable of carrying on the society to wealth and prosperity, but of surmounting a hundred impertinent obstructions with which the folly of human laws too often encumbers its operations.”