The U.S. stock market's alarm bells are ringing loudly right now. Investors beware! Based on my research, here are five good reasons why long investors need to be cautious:

1. This is the second longest period without a ten percent correction in the past 75 years.
2. The average bull market historically lasts 30 months. The current bull market is 55 months old, commencing on October 9, 2002.
3. The average bull market gain is 84%. The current bull market gain for the Dow Jones Industrial Average is 82% (closing on October 9, 2002 at 7286.27 and closing on Friday at 13,264.62).
4. The Dow Jones hit an all-time high on Friday. The Standard & Poor's 500 Index closed at 1505.62 on Friday, the first time over 1500 since 2000. The S&P 500 is within striking distance of the all-time high of 1527.46 on March 24, 2000, and the start of the big tech crash.
5. And probably the most important red flag is investor enthusiasm that things are going to just keep going up, because it's different this time. For example, my 22 year-old son Nathan, a newly minted stock broker, is feeling invincible right now. His portfolio is up 18.5% since December 11, 2006. Nathan is feeling good and he should because of performers such as Crocs, Inc., footware and apparel manufacturer. Crocs (CROX) was up $11.44 (20%) on Friday, closing at $68.85 (up 60% since Nathan bought it in December).

But Nathan, beware! The good times as a long investor are going to become more challenging!

I smell a bear!

When it comes, my son will learn a lot about investing.

Pierre Cutler
The Sacramento Executive