100 Yr of Data Says: ‘Buy this Bull Market’

100 Yr of Data Says: ‘Buy this Bull Market’


The great Fidelity Investments money manager Peter Lynch once said; “More money has been lost by investors trying to anticipate corrections, than has been lost in corrections themselves.”

The bottom line is this: 100-years’ worth of data is screaming at us to buy stocks. The widespread pessimism is telling us it’s a great time to buy stocks, too.

The Big Qs: Will you listen to 100 years of data, or will you listen to your emotions?

The Big A: Record highs are nothing to fear, they cause for celebration.

When stocks hit all-time highs, more all-time highs are likely next up. Since 1915 the DJIA has made over 1,350 new all-time highs. That works out at roughly 13 new highs a year.

According to 104 years of data, stocks climb an average of 7.8% in the year after they achieve new all-time highs, and 5 years later, stocks rise another 32%, on average.

And once the market hits a new high, there’s a 90% chance it will hit another high within 4 months, meaning record highs are rarely a danger sign. Instead, they are steps along the path to more all-time highs.

Great investors think in probabilities, not certainties. But a 90% chance of making money is about as close to “certain” as it gets.

Humans are wired to run away from things that “feel” dangerous. Record high stock prices feel dangerous. So, instinct tells us paying a high price for anything is bad.

In most areas of life, this instinct serves us well. It will save you from getting taken advantage of by salesmen.

But with investing, this instinct works against us.

Over 100-years of data shows there is nothing dangerous about record highs. Since Y 2013 the S&P 500 has hit 223 new all-time highs.

HeffX-LTN’s overall technical outlook for the S&P 500 broad market index is Bullish to Very Bullish in here.

Stay tuned…

DIA, DJIA, SPY, Bull, Market, buy, highs, Very Bullish, investors,

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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