Stocks have taken off in the first hour of trading, with the Dow index at around 14,259, which is almost 100 points higher than its record close of 14,164 on Oct. 9, 2007 - before the recession and financial meltdown. Comig back from the depths of 2008 and 2009, Wall Street has shown remarkable recuperative skills. We'll see if it holds on over the next few hours of trading, though even on an intra-day basis it's an achievement. From the WSJ:
The Dow Jones Industrial Average is back in record territory, and now everyone wants a piece of the action. Stockbrokers say clients are phoning in orders. Mutual-fund data show investors buying U.S.-stock funds, which they had fled for years. This is classic investor behavior. History shows that investors typically get excited and jump into stocks when indexes are hitting records. They also tend to sell when indexes are down, which means they sell low and buy high. No wonder they have so much trouble matching index gains.
Unfortunately, bull markets tend to be getting long in the tooth by the time they hit record territory. There were exceptions, but the median bull market had less than two years to go after that first record. The Dow usually had real gains left--a median of 28%, according to Ned Davis. If the current bull market matched that, the Dow would pass 18000 before topping out, up from 142219 in early trading Tuesday. While most of the gains would be over, those remaining 4,000 points certainly would be worth having--assuming this bull market is typical. Still, anyone who waits until after the record to buy should be aware that the end may be nearer than the beginning.