Stock market trading – Two other elements are useful in determining how high the market is.

One is the price/earnings ratio. Using this same list of Dow-Jones Industrials, the shares were selling at 19 times annual earnings in October, 1929, only 6 times earnings in 1932, and about 18 times earnings in December, 1959. Secondly, the market has been historically high whenever the yield on quality stocks was substantially less than on prime corporate bonds. These are some of the things to look for in determining just how high the market is. But remember, all stocks do not rise and fall together. (The oils had a bear market all their own between 1956 and 1960, when the total market was moving to all-time highs.

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