A bull market can promote overconfidence. You may be lulled into thinking that the major indices will rise for years to come. That is not a given. The danger arrives if the market slumps and your income is too heavily tied to equity performance. The upside is that when the bulls run, it may be worth assuming greater risk exposure as a tradeoff for greater investment yields.
Asideways or bear market could reduce your income. If you are heavily invested in equities, this is a natural consequence. Having a fair percentage of invested assets in debt securities may help to offset it.
How can you spot a climate shift? No one has a crystal ball. If Wall Street behaves a certain way for 2-3 weeks, that may be a clue. The classic bull market tends to be characterized by confidence, optimism, minor volatility, small daily gains, and occasional losses. Emerging bear markets tend to be rocky – featuring not only major descents, but also major rallies.
You may retire in one market climate, only to see another emerge. Market cycles are as inevitable as economic cycles; a shift could coincide with your retirement.