All-time highs seem to make some investors concerned since there is a fear that this is as good as it gets, and that problems may be just around the corner. But, that historically hasn’t been the case. In fact, higher markets tend to follow market highs. For investors fretting about U.S. market levels, we should take comfort in knowing that we invest in global markets, the majority of which are not at all-time highs.
Even though higher markets have historically followed new all-time highs, it doesn’t mean that stocks won’t be volatile along the way. As seen in the chart below, the intra-year range of returns that U.S. stock investors have to experience is quite wide. In fact, the volatility experienced at the beginning of the third quarter is well within the range of reasonable possibilities.
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