90 Years Of History Suggests A Move Like This One Is Followed By A Market Bust

BusinessInsider.com has an interesting analysis that says that we would could be in for a correction.  I am not sure that I agree but it is hard to argue with the metrics.

If you continue to follow the practice of investing in solid companies and making sure that you are sitting on the sidelines when the market turns against your stock pick, you should be fine.  In fact you may thrive!

90 Years Of History Suggests A Move Like This One Is Followed By A Market Bust

Based on data going back 90 years, whenever the 12-month rate of change (ROC) in the Dow Jones Industrials Average has exceeded 40 percent, it has generally signaled trouble ahead.

In three cases, a 12-month ROC above that level has only marked a short-term pause, after which the market traded higher.

But on 11 other occasions, similarly rapid advances have been followed by notable corrections, including the collapses that followed the 1929 and dot-com era peaks, as well as the 1987 crash.

Given those odds, increasingly exuberant bulls might want to have a rethink.

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