The US stock market is still in the midst of a wild bull market, with the S&P 500 and Dow Jones Industrial Average (DJIA) rising as much as 25% and 17% respectively over the past year.
This week the S.& ;P 500 is expected to close at a record high, but the Dow is expected only to close above the 30,000 mark.
The key question is: Is there enough capital in the markets for all of the stocks that have surged?
“The answer to that question is, ‘yes,'” says Paul Sallon, an associate professor of finance at the University of Notre Dame.
“It’s a very complex and hard question.
If you have a long-term view, you want to think of this as a long cycle, with a period of boom and bust.
If the cycle has to end, you may be in a more stable, more predictable period.”
Sallan is the author of “The S&s Best Buy Index: How to Find the Right Market, Trader and Stock Trader” and a contributor to “MoneyWatch: The Power of Investing” on MoneyWatch.com.
He is also the co-author of “A Guide to the Market” and the forthcoming “Trading Economics: Commodities.”
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