LIVE MARKETS-Strategist sees more S&P 500 highs despite investor nerves

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STRATEGIST SEES MORE S&P 500 HIGHS DESPITE INVESTOR NERVES

Fear of heights, which is known as acrophobia, is one of the most common phobias.

And Ryan Detrick, chief market strategist at Carson Group, is drawing a parallel between this issue and new market highs, which he says have a tendency to create a very uneasy feeling in the belly of many investors.

However, Detrick believes that another way for investors to look at new highs is to realize the wind is at your back.

As Detrick sees it, new highs happen in clusters that can last a decade plus. Here is a rough recreation of his chart showing new highs happen in clusters:

Given that he sees a current cluster, he remains optimistic that many more new highs are still left in this secular bull market.

"The S&P 500 became 500 stocks in 1957 and it has made a total of 1,249 all-time highs over this period. Incredibly, that comes out to a new high 7.2% of all trading days, or a new high every 14 trading days, approximately," writes Detrick in a note released on Wednesday of this week.

He adds: "That is a new high every three weeks! In other words, new highs happen a lot and being scared of new highs isn’t going to benefit your portfolio."

Should one buy at an all-time high?

According to Detrick, since 1990, the S&P 500 has been higher a year after an all-time high 82.4% of the time with a "very impressive" median return of 13.5%.

Detrick's bottom line is that "for every peak in 2000 or 2007, there are literally hundreds of other new highs that weren’t a major peak. And the good news? We don’t think the most recent new high is the peak just yet!"

(Terence Gabriel)

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