This is a new installment in an ongoing series where Marc Bautis, Wealth Manager and Founder of Bautis Financial, comments on hot topics in the financial industry.
The S&P 500 just closed at another all-time high.
Cue the headlines. Cue the opinions. And for many investors? Cue the hesitation.
When markets are setting records, it can feel like the worst possible time to put new money to work. After all, nobody wants to buy at the top.
But here’s the thing: All-time highs are not rare. In fact, they’re more like mile markets on a long journey.
Between 1950 and 2024, the S&P 500 has hit more than 1,250 of them. That’s over 16 new highs per year, on average.
So if you’re thinking, ‘Maybe I’ll wait for a better entry point,’ you’re definitely not alone. But let’s break it down…
Investing at all-time highs has actually produced solid returns, often not far off from investing at any random time.
Here’s how those returns compare:
- 1-year holding period: 11.2% after all-time highs vs. 12.6% for all periods
- 3-year holding period: 10.9% vs. 11.5%
- 5-year holding period: 10.3% vs. 11.3%
In other words, investing at a market high has been just slightly below average… still solid, and far from concerning.
Since 1950, the market has dropped more than 10% in the year following an all-time high only 9% of the time.
Look out 10 years, and the S&P 500 has never ended that period more than 10% down after any of its record highs.
That’s a powerful reminder for long-term investors.
Yes, the market could pull back – that is always a realistic possibility, and past performance is no guarantee of future results. But, it might not.
History shows that investing at all-time highs has not been as risky as many investors assume. It’s been, at least historically, a reasonable time to invest. And for long-term investors, it has often worked out just fine.
If you’re not sure what to do next, let’s talk about your options. You’re welcome to schedule a call with our team of financial advisors using the link below.
Bautis Financial LLC is a registered investment advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.
Retail Investors Gain Greater Access to Private Markets – But Not Without Risks