This week, the Dow Jones industrial average and the S&P 500 index have reached their highest numbers—14,000 and 1,500, respectively—since before the recession (October 2007, specifically), according to CNN Money.
The current bull market, which originated in March 2009 but ramped up significantly during the Federal Reserve’s second round of bond-buying in 2010, is the result of several factors. Improvement in Europe’s economy, continued growth in China, the avoidance of the fiscal cliff and the Fed’s stimulus actions number among the reasons for rising stock prices.
Although individual investors shied away from the stock market in the years since the economic downturn, many have decided that now is the time to get back out there. One particularly large inflow of cash occurred as the S&P 500 hit a five-year high after the government reached an agreement on the fiscal cliff, according to CNN Money.
Some analysts warn, however, that the bull market is ending, and that if you haven’t invested already, now may not be the time to start. Although the Fed announced on Wednesday that it will continue purchasing bonds, the future of the economy once that program ends is unclear. Additionally, corporate earnings are no longer growing like they have been, which indicates that this extended period of growth is on its way out.