As an investor, It is perfectly normal to get nervous when you see your stock portfolio climb to a record-breaking all-time high amount. Whenever a company achieves unprecedented financial success with its share price, investors will undoubtedly have an inner battle going on about whether it would be the perfect time to sell vs holding out hope for an even higher boost. Experts say this type of behavior is not only good news but that it’s nothing people should fear. These all-time highs are actually stepping stones to even greater achievement, not the danger sign they are feared to be. Not only should people not sell, but it would also do them good to purchase more shares.
While nobody can ever accurately predict whether the stock market will start trending in a bull or bear direction, it’s safe to say that historical data carries a lot of weight when searching for patterns. By examining a 100-year chart that documents the all-time highs and lows of the Dow Jones Industrial Average (DJIA), it can be assumed that the marketplace hits all-time highs approximately 13 times each year.
It gets better. For stocks hitting their first-ever all-time high, history dictates that they will see an average climb of 7.8% the following year. Better still, four years after that predicts another 32% increase, on average. As for the market as a whole, once it hits an all-time high, it is 90% predicted that it will again reach another high again within four months.
In addition to just studying the markets, it’s also wise to keep an eye on the company itself. If you see that revenue is still increasing and they are hitting all of their quarterly investor goals, then it is logical to assume that they will continue to succeed on the stock floor as well. Other data you should monitor is customer interest and growth. Search for company profiles on social media to see the size of the audience and the temperature of the crowd, culture-wise. If there is any unrest or a scandal, study how well the company owns responsibility and works to fix it That could be a good predictor of its future as well.