Dow 5,000?

Despite yesterday's sell-off, make no mistake: We've been coasting along quite nicely for quite some time now. Indeed, if the market resumes its upward trajectory, our current bull run will have its fifth birthday later this year. And while hitting Dow 14,000 last week was, admittedly, just an arbitrary milestone, it was still fun to observe, something akin to watching as your odometer flips over to a fresh set of zeroes. Even better, to the extent that the rise reflected investor optimism about corporate fundamentals and earnings -- as opposed to a top-down assessment of economic trends -- 14,000 was an arbitrary marker with investing substance behind it.

Call it the best of both worlds.

Alas, what goes up ...
... usually comes down. See February's nosedive for details. Or the one we lived through last summer. Or yesterday's.

For an even more dramatic example, consider the meltdown that occurred in early 2000.

As you may painfully recall, the market tumbled hard then -- and for quite a long while, too. Indeed, between March of that year and the close of 2002, the S&P-tracking SPDRs (SPY) declined by 33%. Meanwhile, the Nasdaq 100 Trust (QQQQ), today known as the PowerShares QQQ , which counts Amgen (Nasdaq: AMGN), Gilead Sciences (Nasdaq: GILD), and Electronic Arts (Nasdaq: ERTS) among its top holdings -- shed some 77% of its value over the period.

With those cautionary tales in mind, savvy investors should strive to fix their portfolios while bargains abound, in part by ensuring that their basket of investments is spread intelligently across the market's valuation spectrum. Buttoned-down "value" stocks, for example, tend to hold up better than growth-oriented fare during downturns. Case in point: During the period cited above, the Russell 1000 Value bogey -- which specializes in the likes of Wells Fargo (NYSE: WFC), JPMorgan (NYSE: JPM), Johnson & Johnson (NYSE: JNJ) and Time Warner (NYSE: TWX) -- declined by "just" 4.7%, while the S&P and Nasdaq 100 plunged into double-digit downward spirals.

Things are looking up
Some investors, meanwhile, actually made money over that stretch of time. Indeed, in the May issue of Champion Funds, we recommend a fund that posted a gain of more than 28% while the aforementioned indexes were headed south. This fund, in other words, plays a mean defense, and over time, its rewards have been plentiful.

And that's true, by the way, of the overall Champion Funds track record. Not to brag or anything (OK, maybe just a little), but since opening for business more than three years ago, 94% of our recommendations have made money for shareholders, and taken collectively, our list o' picks is up on the market by a double-digit margin.

The Foolish bottom line
Contrarian that I am, I think a great way to celebrate the great market run we've had is to prepare for the market's all-but-inevitable next pullback, which we just might be experiencing right now. Even if you invest primarily in individual stocks, it can pay (literally!) to lay down a foundation of world-class mutual funds before assuming the greater risk that comes with individual equities. If you need a few fund ideas, Champion Funds can help. Take a risk-free spin, and see for yourself.