Should We Fear All Time Highs?

As the S&P 500 churns just below its all time high, many seem inclined to sell their equity holdings on the basis of the highs alone.  But is there really reason to be concerned just because the indices are near new highs?

US equities have a long history of making and breaking all time highs.  After all, the Dow has shown long term appreciation of value for over 100 years.  However, given that the Dow has generally risen, it was surprising to me that it has spent a relatively infrequent number of days making new all time highs.  In 28,400 trading days since 1900 the Dow has closed at a new all time high just 1,114 times, a little under 4% of the time.  That’s not necessarily reason to be concerned, but perhaps the moral is that securities markets have a way of giving plenty of buying opportunities.

New All Time Highs Dow

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