The high valuation of the S&P 500 has raised concerns, but it may continue to reach new highs

Goldman Sachs analysis shows that the S&P 500 usually sees further gains before a similar period of overvaluation. To be sure, the S&P 500 has seen relatively small gains in other periods when it is at its current valuation level. But since 1990, when the index is 10%-20% above the model’s fair value (currently around 13%), the median 6-month expected return remains positive most of the time. JPMorgan Chase & Co. strategist Dubravko is skeptical, citing high valuations as a reason for concern. However, those who are ready for more earnings are pinning their hopes on continued earnings growth. Gina Bolvin, President of Boulvin Wealth Management Group, said that when the market makes new highs, we usually see momentum breed momentum, followed by new highs.