Ask Matt: Can stocks keep going higher?

Q: Can stocks keep going higher?

A: President-elect Donald Trump’s victory has been a surprise for investors. The key going forward will be for investors to build their portfolios so they can capture additional upside, while being prepared for any more shocks.

So far, there’s been no question this market is headed higher. The Dow Jones industrial average is up 9% this year and doesn’t appear to be running out of steam.

The Dow pierced 19,000 for the first time in history Tuesday. Analysts are calling for even more upside. If the price targets on the 30 stocks in the Dow are correct, the market measure would be at more than 20,000 in 18 months.

But investors need to appreciate while bullishness rages, investors are assuming the best. Much of the market’s move upwards is a pricing-in of lighter regulation and more government spending. It’s yet to be determined if Wall Street’s bullish assumptions about economic growth actually pan out.

Meanwhile, serious headwinds persist, such as the strong dollar, which hurts U.S. exports. Higher interest rates, too, could hurt real estate and private borrowing. Now is an ideal time to consider how risky your portfolio is and dial back risk if you’re not comfortable.

Paste BN markets reporter Matt Krantz answers a different reader question twice a week. To submit a question, e-mail Matt at mkrantz@usatoday.com or on Twitter @mattkrantz.