Health & Fitness
The S&P 500 rose to hit an intraday record high for the seventh time in eight sessions today: Time to get out?
Can the stock market keep going higher?
As most investors know, the stock market does not move in a straight line and in just one direction. Volatility is and always will be a big factor in investing, and simply just comes with the territory. Today with the market seemingly hitting new highs day after day, many people are left with the feeling that either; “I may have missed the opportunity” or “Is it time to get out”? While attempting to time the market is basically impossible to do on any consistent basis, it is important to remember that while this stock market is certainly not as cheap as it had been, there still may be some opportunity to see growth from here. This is primarily due to the fact that the ten year Treasury is still only around the 2.58% range. As of 3/31/14 the P/E (Profits to Earnings ratio) of the S&P 500 Index was 15.2x with a dividend yield of 2.0%. How does that compare to other time periods?
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Well, on October 9, 2007 the last time the market peaked, the P/E was also 15.2x, the dividend yield was 1.8%. However the ten year Treasury at that point yielded almost twice as much, at 4.7%. Prior to that one would go back to March 24, 2000 with a P/E of 25.6x, dividend yield at 1.1%, and the ten year treasury at a whopping 6.2%. Our belief is that with the Treasury yield falling YTD and much below previous peak levels, this market still has room to go higher. Of course, investing is meant for long term investors and we would always recommend you speak with your financial advisor prior to starting any investment plan. Past performance does not guarantee future performance, and all investing carries varying degrees of risk.
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To discuss how this subject or other financial subjects may relate to your own financial circumstance, please contact me at the contact information below:
Christopher N. Congema, CFP®
President, Investment Advisor
Core-X Wealth Management, LLC
This communication is from Core-X Wealth Management, LLC, a New York State Registered Investment Advisory firm. The information in this blog is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax, legal, or investment advice from an independent professional / financial advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security.
