Have you ever wondered how billionaires continue to get RICHER, while the rest of the world is struggling?

I study billionaires for a living. To be more specific, I study how these investors generate such huge and consistent profits in the stock markets — year-in and year-out.

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But looking at the U.S. economy, it portrays a different image; it appears things have improved. Unemployment is lower and consumer spending has increased since it edged lower in the financial crisis—both possible good signs of a stock market rally.

To no surprise, the noise is getting louder and louder as the key stock indices are moving higher. The bears are calling for the end of the bull market, while the bulls are cheering for the key stock indices and believe that they are bound to go much higher. Estimates are being thrown out; for example, some are calling for the Dow Jones Industrial Average to reach 20,000.

Regardless of the noise, looking at the long-term chart of the key stock indices like the S&P 500 (INDEXSP:.INX) and the Dow Jones Industrial Average (INDEXDJX:.DJI), it appears they are in a breakout. Take a look at the long-term chart of the S&P 500 below:

Chart courtesy of www.StockCharts.com

The S&P 500 recently broke above the previous resistance area (as indicated by the red circle in the chart above)—an area that’s considered an important level by technical analysts and where the index turned and headed lower in 2000, and then again in 2007. However, the chart shows the direction is currently in favor of the bulls—the key stock indices may just continue to climb higher.

By looking at this, should investors jump into the stock market with full force and buy? The answer to this question is simply “no.”

From the chart above, it is clear that the key stock indices like the S&P 500 are in long-term breakouts, but there are still some risks that investors need to watch out for. Things can turn very quickly, and they might just hurt their portfolio with losses.

To profit from the soaring key stock indices, investors may want to look at exchange-traded funds (ETFs) that track the performance of the stock market. One example of this type of ETF is the SPDR S&P 500 (NYSEARCA:SPY), which tracks the performance of the S&P 500. Another ETF worth looking at is the SPDR Dow Jones Industrial Average (NYSEARCA:DIA); as the name suggests, this ETF lets investors track the performance of the Dow Jones Industrial Average.

Regardless, investors need to continue to focus on asset allocation, because a portfolio allocated to just one asset class can be too risky. Those who are saving for retirement  should continue to focus on this principle, since every penny counts.

This article is brought to you courtesy of Moe Zulfiqar from the Daily Gains Letter .