Some Basic Questions to Address

I've seen far too many retail investors asking this question, "the stock markets / funds have reached 2007 levels, is it too high?" Yet the same investor somehow does not ask the same question for property prices, always expecting property prices to reach new highs. Stocks, properties and the GDP always reach a new high over time. Property hit a high in 1996 that was not broken until 2010! It took 14 years to break the last high! Yet the STI was 1800 in 1997, falling to 900 in 1998 before shooting up to 2500 in 1999. It fell to 1250 when the internet bubble burst but recovered to 3830 in 2007, before falling to 1450. It is 3300 today. So do stocks always break a new high? The answer is a resounding yes.

Below is a chart of S&P500 from 1950 to present. Even though US stocks have been stuck in a consolidation trend since 2000, it has come a long way since 1950!