One economic indicator we track is market breadth. This measure looks at the underlying number of stocks that are trending with the overall market movement. When breadth is high and markets are also at high levels, as they are now, that has historically been a healthy signal to investors. When we look back a year ago, markets were led by relatively few companies—breadth was low. Today, however, we see a diversity of sectors and industries participating in the upward trend.

Investors may wonder how long can this be sustained? While we can’t predict the future, we can look to the past. Medium to long-term holders have fared well, even after new all-time highs had been reached.

V21148802