{"id":10812,"date":"2016-08-19T10:09:04","date_gmt":"2016-08-19T17:09:04","guid":{"rendered":"http:\/\/www.marketriders.com\/investing\/?p=10812"},"modified":"2016-12-20T13:41:47","modified_gmt":"2016-12-20T21:41:47","slug":"stocks-peaked-last-hardly","status":"publish","type":"post","link":"https:\/\/www.marketriders.com\/investing\/stocks-peaked-last-hardly\/","title":{"rendered":"Have Stocks Peaked At Last? Hardly"},"content":{"rendered":"

If you follow the financial news on websites or cable TV, it’s easy to run into the same argument over and over.<\/p>\n

Stocks peaked. Get out now while you can. What’s fascinating about these market “top” calls is how consistent they are.<\/p>\n

Stocks\u00a0hit all-time\u00a0highs on one day. The next day it happens again<\/a>. Then again.<\/p>\n

\"stocks<\/p>\n

The problem is, investors confuse stock market indexes with\u00a0a mountain top. Everyone knows mountains have peaks. From there, all directions are down.<\/p>\n

But stock market charts are not mountains. They are two-dimensional representations of numbers.<\/p>\n

Those numbers over long periods move up. It can seem like a trick, a trap to avoid. Surely there is a point where stocks can go no higher?<\/p>\n

Yes, there is. There can be\u00a0market bubbles<\/a>\u00a0in stocks which go extraordinarily high \u2014 sometimes straight up! \u2014 then fall extraordinarily low soon after.<\/p>\n

These are not peaks, however. They are bubbles, plain and simple. They pop and stocks quickly return to more reasonable levels.<\/p>\n

The underlying forces of the economy\u00a0didn’t change before the bubble started, and they remain\u00a0the same after a bubble pops. That’s why over longer periods of time \u2014 through wars, bouts of inflation, scandals and political crises \u2014 stocks go\u00a0higher and higher.<\/p>\n

Jeremy Siegel, a professor of finance at the Wharton School of Business and author of Stocks for the Long Run<\/a><\/em>, puts it this way: Stocks beat bonds, beat gold, beat cash.<\/p>\n

In fact, he says, stocks grow in value at about twice the rate of long-term economic growth, thanks to reinvested dividends. That’s why stocks beat inflation.<\/p>\n

No substitute for stocks<\/h2>\n

And there’s no real substitute for stocks over a period of 10 years or more. You won’t find the same growth elsewhere, nor should you try to find it elsewhere.<\/p>\n

It’s when people decide that the stock market has peaked that they tend to sell and sell hard. Joining them in the panic is a clear way to lose money.<\/p>\n

Yet buying as\u00a0they sell is locking down future gains at reasonable prices.<\/p>\n

A solid, risk-adjusted portfolio of index funds<\/a> will give you those gains over time. Rebalancing helps you pick up the bargain stocks that others cast off.<\/p>\n

Meantime, you can ignore the TV pundits screaming that stocks\u00a0peaked and you should sell, that every direction is down.<\/p>\n

They’ve been wrong for decades upon decades, while stock investors have prevailed.<\/p>\n","protected":false},"excerpt":{"rendered":"

If you follow the financial news on websites or cable TV, it’s easy to run into the same argument over and over. Stocks peaked. Get out now while you can. … Read more →<\/span><\/a><\/p>\n","protected":false},"author":8,"featured_media":10813,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_wp_rev_ctl_limit":""},"categories":[3],"tags":[62,43,55],"yoast_head":"\nHave Stocks Peaked At Last? Hardly | MarketRiders<\/title>\n<meta name=\"description\" content=\"You can pretty much ignore the TV pundits screaming that stocks peak and you should sell, that every direction is down. 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