Topping Point?

The market is hitting record levels. Should we be worried?

Record levels on the S&P 500 remind people of October 2007 and August 2000. Folks get a gut-clenching sense of déjà vu that they’ve seen this movie before, and it isn’t a feel-good flic, it’s more like Halloween Part 3. They keep waiting for Jason to jump out from behind that tree in his hockey mask.

But this isn’t a movie, even if there seems to be a laugh track around every corner. The Dow and the S&P are now in record territory, earnings are growing, margins are stable, and the economy has been growing steadily for four years. The market leads corporate earnings which lead the economy. Just because a market is at a new high doesn’t mean a pullback is imminent.

Sure, there will be turbulence ahead—there always is, as industries and companies go in and out of favor. That’s part of the creative destruction of capitalism. But bull markets grow on skepticism. All that worry out there just helps the market get stronger.

Douglas R. Tengdin, CFA

Chief Investment Officer

By | 2013-05-08T10:01:52+00:00 May 8th, 2013|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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