Microsoft Corporation (MSFT), The Procter & Gamble Company (PG): These 3 Things Will Keep the Dow Jones Industrial Average 2 Minute (.DJI) at Record Highs

Performance-related buying of stocks has been muted in recent years by strong performance of bond investments, which reaped the benefits of falling rates through capital gains on their value. But those gains came at the price of dramatically lower yields, squeezing income. Now, even the smallest move upward in bond yields has sent prices of bond funds downward, showing investors that even the safety that bonds offer still has potential to cause losses in their portfolios. That realization should only bolster the push that record highs will have on investors to get into the stock market.

Watch for the bull to continue — for now
These three factors all point to continuing strength for the stock market in the months to come. Eventually, pressures on interest rates will probably be the first of these factors to turn unfavorable, and that could spur a more substantial correction. By following these three factors, you’ll have an early warning system that could help you anticipate a market downturn before it happens.

For now, though, investors have jumped aggressively on every minor drop in share prices as a buying opportunity. As long as alternative investments offer such puny returns, they’re not likely to look anywhere else.

The article These 3 Things Will Keep the Dow at Record Highs originally appeared on Fool.com is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter, @DanCaplinger. The Motley Fool recommends Johnson & Johnson and Procter & Gamble and owns shares of Johnson & Johnson and Microsoft.

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