Stocktake: New highs are bullish, not bearish

Many investors get vertigo when stocks are trading at all-time highs. However, there’s nothing bearish about new highs, according to LPL Research data. Indeed, returns get better after a long time without new highs.

Pattern emerges

Historically, after hitting their first high in more than five months, stocks enjoyed stronger returns over the following one-, three-, six- and 12-month periods. This time may be different, of course, but don’t make the mistake of thinking new highs presage poor returns. Market momentum isn’t bearish – it’s bullish.