All Time High Anxiety
Posted on 15th October 2021
Financial journalists periodically stoke investors’ record-high anxiety by suggesting the laws of physics apply to financial markets—that what goes up must come down.
But shares are not heavy objects kept aloft through strenuous effort. They are perpetual claim tickets on companies’ earnings and dividends.
If stocks have a positive expected return, reaching record highs with some frequency is exactly the outcome we would expect.