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Although valuations are currently on the high side, they’re not at the ‘irrational exuberance’ levels that in and of themselves trigger bear marketsRichard Drew/The Associated Press

John Reese is CEO of and Validea Capital, and portfolio manager for the National Bank Consensus funds. Globe Investor has a distribution agreement with, a premium Canadian stock screen service. Try it.

We've all been there: You're out on a date, the night has gone well, and now there's a pause in the conversation as you stand outside the restaurant and prepare to say good night. Eyes meet. Pulses pound. Should you move in for the goodnight kiss? You start to, but then hesitate, fearing rejection. You start again, stop again, and, before you know it, your date is gone and the opportunity has passed.

A similar scenario has been playing out for investors in U.S. stocks in recent years. The financial crisis and Great Recession were incredibly painful events, the financial equivalent of going in for a goodnight kiss and having your date slap you in the face. Many investors have thus spent the past several years out of the market dating scene, fearing further rejection. The numbers bear this out: In 2007, 65 per cent of adult Americans owned stocks, according to Gallup; in 2016, the number is down to 52 per cent, the lowest in the 19-year history of the polling firm's survey.

Like a date that hesitates, those who've ignored stocks have missed out on huge opportunities – the S&P 500 has tripled since March, 2009. Those investors surely have been tempted. But it seems that any time the momentum really gathers and they might jump back in, another mini-crisis surfaces: the commodities bust, interest rate hikes, Brexit. And the would-be market-smoochers pull back.

For much of this bull run, the U.S. market has offered a curt "goodnight" to those who have hesitated, moving on quickly to dates with other more opportunistic investors. But over the past year and a half, that's changed; the market has been just about flat. Sure, it's been up and down, but all in all, it's back where it started. This is the equivalent of your date giving you a second chance after you freeze up. And what's nice is that our "date" has had time to address some red flags. Those interest rate hikes that were supposed to be the market's undoing have started and the market has held up. The much-questioned U.S. economy has continued to grow. The plunging commodities market has stabilized. Now, I think the market is offering an opportunity for investors who've been on the sidelines to get in before the next leg up. "Hurry up and kiss me – I won't wait forever," it seems to be pleading.

The facts

Of course, I don't know for sure that buying stocks now as opposed to waiting, say, six months or a year will prove to be prudent. Some say a bear market looms; perhaps it does – no one can predict when bears will growl. But I do know that the market tends to stay in bull mode much longer than it stays in bear mode. The past nine U.S. bears have averaged a little over a year, with an S&P 500 decline of about 34 per cent; the past eight bulls have averaged nearly five years, with gains of more than 140 per cent. And bulls can run for a long time after you think they've gotten long in the tooth – one (1990-2000) lasted almost 10 years.

Plus, while valuations are currently on the high side, they're not at the "irrational exuberance" levels that in and of themselves trigger bear markets. (How could the mood be "exuberant" when about half of Americans don't even own stocks?) Plenty of individual stocks are trading at very attractive valuations. I pick stocks using models inspired by history's best investors and they are finding plenty of bargains in the United States. Nine are shown in the table below.

StockTickerTrailing P/E
Banco MacroBMA-N12
Thor IndustriesTHO-N15
Valero EnergyVLO-N7
Caleres Inc. CAL-N13
Polaris IndustriesPII-N14
United TherapeuticsUTHR-Q6
Ormat TechnologiesORA-N16
Westlake ChemicalWLK-N9

Source: John Reese;

The time correction

What has occurred over the past year and a half is not a correction in price but a correction in time; the market has paused to allow earnings and revenue to catch up to stocks: Standard & Poor's sees S&P 500 companies' earnings growing in the second quarter and continuing on to an all-time high in the third quarter. If that happens, you can bet that the market will move higher and the chance to give the market a kiss at early-2015 prices will be gone.

There are always going to be reasons not to move in for the market kiss. Make your decisions based on facts and data, not fear. When I look at the facts, I see a market with room left to run. And remember, if you've been sitting on the sidelines, you don't need to go all-in on stocks. You can dollar-cost average in over a period of weeks or months. To me, the bigger risk is not that the market will reject your advances; it's that, five, 10, 20 years from now, you'll look back and wish you'd had the courage to pucker up.

Disclosure: I'm long BMA, THO, AMSF, VLO, CAL, PII, UTHR and WLK.