We’ve seen incredible wealth created over the past 18 months, so what is causing investors to get nervous? Why are so many Oklahomans asking each other, “Are stock prices too high?” It appears the new highs themselves are causing the concern.
The S&P 500 index has compounded at over 16% a year in the last 10 years, which is much higher than the long-term average of around 10%. This year alone, the S&P 500 index has closed at an all-time high over 50 times.
Thus, it is during times like this when many will comment that the market is too high and is surely doomed to go lower or even crash. Also, it was just last year when we experienced the COVID crash, when stocks went down 34% in 33 days, the swiftest market decline in history.
With horrific market downturns in recent history, such as the COVID crash or the 2008 financial crisis, it can be tempting to try to time the next downturn. A big problem with the timing approach is that it…