The long, high road for US stocks

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How far for how long?

It’s been a great year for US stocks, with indexes broadly up 25 percent or more. As the Dow hovers around 16,000, some pundits proclaim “it can’t go up any farther” or “sell everything now!” Are they right?  Let’s take a fact-based look.

The long, high road

We all know that US stocks have gone up for the last century, compounding at about 9 percent annually, with a lot of ups and downs along the way. It’s human nature to question during a strong rally if stocks can go up even more. After all this up, aren’t we due to go down?

13 bull markets

Chart of the day shows the 13 bull markets of the last 113 years. Compared to the previous 12, this current advance is relatively young and small. But that doesn’t tell us much. There is no natural law that dictates that an up market must turn down or vice versa. We may see a correction that starts tomorrow, or it may be years. Many have opinions, but no one knows.

Don’t worry, plan

For anyone on the sidelines holding cash, it can be intimidating to buy in at or near record highs. But instead of guessing about whether there is a dip coming, we recommend focusing on the things you can control, like risk, taxes, and costs.  If you are especially concerned about potentially buying in at the top, check our “market timeless” post. It offers an approach that may help.


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This article may include forward-looking statements. All statements other than statements of historical fact are forward-looking statements (including words such as “believe,” “estimate,” “anticipate,” “may,” “will,” “should,” and “expect”). Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Various factors could cause actual results or performance to differ materially from those discussed in such forward-looking statements.

Nothing in this article is intended to be or should be construed as individualized investment advice. All content is of a general nature. Individual investors should consult their investment adviser, accountant, and/or attorney for specifically tailored advice.

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