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Stock indexes have hit all-time highs

Stock indexes have hit all-time highs

| December 14, 2020
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Almost all major U.S. stock indexes have hit all-time highs recently, prompting the question “how much longer can this go on?”  Analysts at LPL Financial addressed this question in its latest 2021 market outlook and it is good news for market bulls.  LPL analysts write. “Reviewing some of the previous major bear market lows—most recently in March 2009—reveals that stocks tended to add gains well after the initial surge.”  As seen in the chart below, the 2nd year gains (shown in light blue) following a decline of 30% or more continue to be strong, averaging an additional 24%, and none were negative going back to 1970.  (Data from FactSet, chart from LPL Research)

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