My thinking is simple. Higher for Longer doesn't automatically mean “sell everything.” It changes the relative attractiveness of different assets. The biggest pressure would likely be on businesses that are highly leveraged, speculative companies with weak cash flow, and assets whose valuations depend heavily on very low discount rates. Meanwhile, investors may find cash, short-term bonds and high-quality dividend-paying companies considerably more attractive than they were during the ultra-low-rate era. If the S&P 500 dropped sharply because of a rate-related sell-off, I would generally buy the dip selectively rather than panic-sell—provided the underlying earnings and balance sheets of the companies I wanted to own remained intact.
For me, the biggest lesson from previous market cycles is that trying to perfectly time the Fed is extremely difficult. I'd rather build a portfolio that can survive higher rates and still have enough liquidity to take advantage when market is good.