By The Associated Press
With the Dow Jones industrials above 20,000, it’s natural to ask what’s going on and what, if anything, investors should do. Here are some answers to common questions that people have about the stock market.
Q. Can the stock market keep going higher?
A. The Dow has more than tripled from its low point during the recession seven years ago. Some experts have been surprised the market has continued to rise so much in recent months, particularly since corporate profits have been mostly shrinking over the last year and a half, but that doesn’t mean the market can’t go any higher. The market is now in the second-longest bull run since World War II, following the rally of 1990-2002.
The election of Donald Trump in November has made investors more optimistic about growth in the economy and the profit potential for industries like banking and energy, which are expected to benefit from his drive to roll back regulations, lower taxes and rev up economic growth.
But as financial advisers will tell you, it’s best to base your investing decisions on your own needs and financial plans, not on what the market is doing any given moment. Don’t load up on stocks if you’re getting ready to retire, for example, since they’re more vulnerable to short-term swings than bonds are. If you’re younger and willing to tolerate the risks that come with owning stocks, they’re generally considered a very good long-term investment.