The stock market reached new record highs on Monday, with the Dow and S&P 500 indexes closing above 17,613 and 2038, respectively.
As usual, the occasion was cause for skeptics to raise concerns that we are in the midst of a market bubble.
But the headline numbers obscure a simple point: Record market highs are not unusual during a bull market—at all. As shown by the chart below, courtesy of my colleague Pat Regnier, record highs can occur again and again for years before the market tumbles.
That’s not to say that another market tumble is completely out of the question. After all, even at the lowest point of the October market slump, stock valuations were at or near historic highs.
But the simple fact of new nominal highs in the market’s major indexes is not by itself reason for concern. As investment adviser and blogger Josh Brown points out in the video below, the market has been hitting new highs about once a month on average over the past 65 years.
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