So Goes January, So Goes the Year: New All-Time Highs in the Stock Market have sentiment bracing for the next shoe to drop… needlessly?

History would actually contradict this sentiment. When looking back at similar instances to today when there has been a gap of at least 1 year between all-time highs, Truist IAG reports that 93% of the time the index was positive in the 12 months that followed the all-time high with an average return of +14%.

Suggesting there is no probable sell-off in the short-term future. Though incredulous to some, the stock market has even gotten cheaper from an analytical standpoint over this timeframe. With the forward price-to-earnings (P/E) ratio down about (-8.2%) compared to the last stock market high in January 2022.

Psychological Studies have found that we are more likely to remember negative experiences over positive experiences, with no scar to remind us. This is not to say that the markets will not or cannot go down from here; they can, and they might. But the most consistent thing about the markets is that no matter where you start, the long-term trend has been positive and new all-time highs are no exception.

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