Investing in S&P 500 at all-time high historically yields significant returns

From Yahoo Finance: 2024-05-17 06:11:00

The S&P 500 hit a new all-time high on January 19th this year, sparking the debate on whether to invest now or wait for a pullback. Research shows that investing at an all-time high usually leads to more highs and higher average returns. Stocks have hit 19 all-time highs since Jan.19, with promising overall upside potential.

Looking at history, the S&P 500 records an average 12.7% total return one year after hitting a new all-time high, which is higher than average 12.4% returns during other periods. Investing right at the all-time high could lead to significant returns over three to five years, outperforming the S&P 500’s average returns during the same time frame.

While individual stock valuations may seem stretched, investing in an index fund like the Vanguard S&P 500 ETF can still be a solid choice, providing diversified exposure to the top U.S. stocks. Alternatively, focusing on smaller businesses within the S&P 500 or an equal-weighted index fund like the Invesco S&P 500 Equal Weight ETF may offer better opportunities for returns.

Considering the historical performance of investing at all-time highs, it may still be a great time to grow your wealth by investing in the stock market, even with the S&P 500 reaching new highs. The key is to focus on long-term growth and stay diversified in your investment strategy by considering different index funds or individual stocks.



Read more at Yahoo Finance: Is Buying Stocks With the S&P 500 at an All-Time High a Smart Idea? History Provides a Clear Answer.