Is the Stock Market Entering Its Melt-Up Phase? Here's What History Says Investors Should Do Right Now.
Yahoo Finance ·
The S&P 500 ( ^GSPC +0.00% ) has been hitting record highs, and its valuation has been near record highs as well. However, the broader index has stagnated over the past two weeks, and as of this writing, it's down 3% in June. There are a lot of things going on in the markets right now, including the Federal Reserve's recent decision to maintain interest rates and Space Exploration Technologies ' (SpaceX) initial public offering (IPO). Is the market finally responding to negative drivers? And what should investors do? Investors have been enjoying a fabulous bull market for the past three and a half years, and as artificial intelligence (AI) continues to thrive, these are heady times. A stock market melt-up happens when investors are willing to pay for distant earnings and do not penalize these companies for massive capital expenditure outflows in the short run, thereby building up market multiples. However, investors should never lose sight of one of the market's most critical laws: It can't go up forever. There will always be corrections and crashes, and overconfidence is a recipe for failure.
DYAX Investor Sentiment
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