Now that the closing bell has rung for the day it’s official: The S&P 500 closed at an all-time high of 1,987 points. Investors today cheered a series of encouraging quarterly announcements from bellwethers like Apple Inc. (AAPL), Delta Air Lines (DAL) and Pepsico Inc. (PEP).
Of course, with the market reaching new highs by the week, there is no shortage of “experts" who want to be the ones who call the top. Fear sells better than greed, and many in the financial media is taking full advantage of this. If you do a quick internet search on "stock market," you’ll bring up plenty of headlines with buzzwords like "overdue," "bubble," "crash," and "meltdown." It has been 33 months since the last 10% correction, compared with the average 12-month cycle, and some consider this alone to be proof that we’re "overdue."
So here’s the trillion-dollar question I’ve been getting a lot lately: Is there an impending correction?
I don’t think so,
What you don’t hear amid the doom and gloom scenarios dreamed up by many pundits is that 10%+ corrections have become less frequent over the past 25 years. And this isn’t the longest bull market—not by far. The longest ever stretch without a double-digit pullback lasted 2,553 days from 1990 to 1997.
But that fact just doesn’t generate the same kind of clicks that the bubble speculation does. The fact is that these valuation concerns are converging at a light time of year for the market—when many Wall Street traders are on vacation and unscrupulous short-sellers attack the stock market when no one is around.
Bottom Line: I understand that there are a lot of negative headlines circulating right now, but I don’t expect any sort of big correction anytime soon. There may be pockets of froth in the market with some stocks that have become overvalued, but I still see plenty of attractive buying opportunities out there. To get the inside scoop on these very opportunities, please stay tuned to this daily blog.