The Only Chart You Need to See About Record Market Highs
Money is not a client of any investment adviser featured on this page. The information provided on this page is for educational purposes only and is not intended as investment advice. Money does not offer advisory services.
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.
Read more on...
- Getting Free Help With Your Investment Challenges
- What Is a Fiduciary, and Why Should You Care?
- A Smart Way To Boost Your Tax-Free Retirement Savings