Something that has been brought up to me several times in the last few months. I hear “This stock market run up is one of the longest ever, so that means the stock market should have a significant decline soon”.
Truthfully history tells you very little when it comes to investing. I read stories all the time about people comparing a chart of the stock market in 1929 versus 2008, etc.
Let’s look at that as an example. When the market peaked in 1929 it took 15 years to exceed the old high. Whereas it took only 5 ½ years to get to a new high from the 2007 peak. Why? Everything was different! A different world economy, a much stronger Federal Reserve, no World War, etc. etc.
In that same way deciding that the stock market is going to decline because it’s been going up for several years makes no sense. You might decide that stocks are very expensive, or that tariffs are going to take a bit bite out of stocks. But that’s not based on history, that’s based on what’s going on now. Because everything is always different than in the past, you really cannot compare markets between periods.
I am not necessarily predicting a continuous market rally. But what happened in the past doesn’t affect current stock prices. Everything is different.