Greg Guenthner

“Many people I speak to see the stock market as a place to get burned,” writes an observant reader. “They are very resistant to reinvesting. They want SAFE.”

I’ve noticed this, too. It’s a byproduct of a decade of turmoil. Investing form 2000-2012 wasn’t easy. You had the dot com bust. Then the housing bubble. Then the worst market crash in decades thanks to a crippling financial crisis.

So yeah, you could say that investors are bit hesitant to jump back into the fray.

It’s also no surprise that the latest round of new all-time highs have spooked quite a few investors…

But when we turn to the numbers, there’s no reason to fear new highs just yet. S&P Capital IQ Chief Equity Strategist Sam Stovall has the stats to prove it. Stovall analyzed the 11 bull markets since 1949. Each of them lasted an average of 57 months. And (here’s the kicker) 7% of the trading days within the bull markets set all-time closing highs.

I suspect this infatuation with new highs will vanish in a few months. It just won’t be interesting news anymore. The only reason new highs are compelling right now is because the market has finally clawed its way out of a massive, decade-long secular bear.

Here’s Stovall with more (via Business Insider):

“During the past few weeks, the financial media has constantly reminded investors that the S&P 500 has recorded successive all-time closing highs. They also make it sound as if we should enjoy these days while they last, for this bull market is therefore likely to end in the very near future. I don’t know why they say that, other than to instill fear and thereby ensure that investors stay tuned. History, on the other hand, shows that new highs are typical in a maturing bull market.”

Snap out of your bear market mindset. Stocks are proving exceptional returns this year. It’s high time you answered their call…


Greg Guenthner
for The Rude Awakening

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Trending Past Turmoil

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The stock market has been light on drama lately. So far this month, the broad market has resumed its attack of new highs, stomping the VIX back toward its lows. In fact, yesterday’s measly drop was just the third time this month that the S&P 500 failed to finish the day in the green.

Greg Guenthner

Greg Guenthner, CMT, is the managing editor of The Rude Awakening. Greg is a member of the Market Technicians Association and holds the Chartered Market Technician designation.

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