) -- The bears are back in town. Or rather, they never left. But after the last five straight days of selling, they sure are getting louder.
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Despite a rip-roaring market in 2013, the S&P 500 is due for higher highs yet to come. The bears are wrong. Here's why.
Look, there's no question that we've been in the midst of a historic rally for the past eleven months. Year-to-date, the
has climbed a whopping 25.3% as I write. If we closed the books now, it'd be the best year for the big index in a full decade. Get rid of the calendar-year constraints and the rally extends more than 30% since last November's lows.
At some point, we've got to wonder, "How high can it go?"
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First things first, I'm no journalist. In my day job, I manage stock portfolios -- so yes, I'm talking my book right now. And needless to say, it's been a blockbuster year for investors who were allocated to stocks early on, and a bloodbath for those who were underexposed, and playing catch-up ever since.
The thing is, even though it seems like bears are only starting to come out en masse now, many of the most vocal ones have been betting against this market all the way up. I'll be the first to admit that even the best professional investors are wrong sometimes (or even frequently), but missing the biggest equity rally in a decade is a whole nother level.
Keep that in mind the next time you hear stocks are doomed.
But there's a difference between
like the market's moved up too far too fast, and having the data to back it up. When you invest by "feel," you subject yourself to bias -- we all do. So I'll stick to the facts today.
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Stocks Are Expensive, Right?
The first question we need to ask ourselves is whether or not stocks are too expensive from a value standpoint. If they are, then maybe there's something to the bear argument after all.