With all the hype surrounding the Dow Jones Industrials hitting 20,000, blowing past the 21,000 mark received no fanfare. Maybe that’s because we expect stocks to keep surging at this point. The so-called ‘Trump Bump’ has continued to maintain the equity market in rally mode – an upswing in stock prices that has lasted nearly eight straight years.
To be blunt, that has never happened before.
The problem could be our complacency. We’ve grown accustomed to seeing higher and higher stock prices. No one is watching for the inevitable bear market. And while stocks continue their torrid run, the bear is starting to growl in its cave.
At this point, it might make sense to be prepared.
Stocks Are a Tad Bit Frothy
It’s not surprising that stocks have done well since the dark days of the recession. After all, most companies – even the biggest sector stalwarts – were trading as if they were going to go out of business in the next week. It really seemed as if traders thought that Johnson & Johnson (JNJ ) would never sell another Band-Aid again, or people would stop drinking coffee at Starbucks (SBUX ).