Many investors have become excited about the $1.5 trillion of mergers and acquisitions that have been announced this year.

That enthusiasm helped push the S&P 500 index and the Dow Jones Industrial Average to record highs Tuesday.

But MarketWatch columnist Mark Hulbert, editor of Hulbert Financial Digest, doesn't share that optimism.

"Each of the last six great merger waves on record ended with a precipitous decline in equity prices," Matthew Rhodes-Kropf, a professor at Harvard Business School, told him. The last of those waves came in 2006-07.

To be sure, that doesn't mean stocks will plunge tomorrow, and Rhodes-Kropf said he doesn't have any idea how long the trend will continue.

The merger mania is "yet another sign that the stock market is overvalued," Rhodes-Kropf said. "But that doesn’t mean the market can’t keep going up for quite some time."

Other experts also are skeptical of the merger wave's benefits.

"There is some evidence that deals may actually be detrimental to the economy, particularly these big bursts," Tara Sinclair, an associate professor of economics at George Washington
University, told The New York Times.

"Economists are pretty divided as to whether they’re a good thing or a bad thing."

Several studies have shown that companies making huge acquisitions often underperform
afterward, Businessweek says. Merging the operations of two big companies involves many complications, and culture clashes can undermine the effort.

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