Chart of the Month | Oct 2024

It’s natural for the stock market to achieve many new all-time highs during bull markets – and it doesn’t necessarily mean the market is “due for a pullback.” Instead, this is often a reflection of economic stability and business growth. Historically, markets have risen over decades, even though they can fluctuate over shorter periods.

American household wealth is up 11% over the past year and 47% (or $50.1 trillion) over the past five years. Investors have reason to celebrate this progress, which has come from both stocks and housing gains. At the same time, however, investors would be wise to consider what it means for their investment strategy – recognizing that the most recent stock and bond market gains have been fueled largely by rising valuations. These valuations, for the most part, have been concentrated primarily in one area of the U.S. equity market: mega-cap technology stocks. This should limit potential gains moving forward, and it increases the potential for market volatility. Now may be a good time to review objectives and reassess strategies to protect against any potential future declines.