The stock market is breaking records. Time for a gut check

Core Insights - The U.S. stock market, along with foreign stocks, bond funds, gold, and cryptocurrencies, is experiencing significant gains, prompting investors to reassess their portfolios [1][2] - The S&P 500 index has risen over 35% from its low in April, indicating strong earnings and easing U.S.-China trade tensions, creating a favorable "Goldilocks environment" [2][4] - Despite current market success, historical trends suggest that corrections and bear markets are inevitable, with the S&P 500 typically experiencing a 10% drop every couple of years and more severe drops of at least 20% occurring less frequently [3][5] Market Performance - The S&P 500 index recently faced a nearly 20% drop in April but rebounded, largely driven by major tech companies [4] - Investors are optimistic about continued profit growth from large U.S. companies, which is essential for justifying high stock prices [5] Market Risks - The market's upward trajectory relies on several key expectations; any failure to meet these could negatively impact stock prices [4][5] - The S&P 500 is currently near its highest valuation since the 2000 dot-com bubble, raising concerns about potential overvaluation [5]