No expiration date on S&P 500 bull run

VALUATION, history shows, is an awful tool for market timing. Equity cycles persist, and selling just because price-earnings (P/E) ratios are high has repeatedly proven a mistake.

But what if the persistence starts pushing up against history? Consider the S&P 500 Index, which has spent 42 months trading in the upper reaches of one range, the cyclically adjusted P/E ratio popularised by Robert Shiller. Only twice before has it stayed higher for longer, each time ending with crashes, in 2000 and 2007.

To say this isn't bothering investors would be an understatement. About US$2 trillion has been added to American share values in eight weeks, with price momentum in the Dow Jones Industrial Average at levels not seen since the Internet bubble. Bulls, firmly in charge, are convinced Donald Trump will inaugurate a cycle of profit growth that reins in valuations.