S&P 500 hit record high, some analysts cautious, uncertain economic conditions.

From The Motley Fool: 2024-05-26 04:45:00

The S&P 500 closed at a record high of 5,321 on May 21, but some analysts predict a stock market correction. The index has dipped slightly to 5,300 but has reached multiple record highs this year. Investors are debating whether to buy stocks with the S&P 500 at these levels.

Historically, the S&P 500 has performed well after reaching record highs. Since 1970, the index has returned an average of 9.4% in the 12 months following a record high. Waiting for a downturn to invest may backfire, as the next downturn could be months away.

Some Wall Street analysts are cautious, citing potential macroeconomic concerns such as inflation and high interest rates. The S&P 500 currently trades at 20.5 times forward earnings, above historical averages. Analysts have provided year-end targets ranging from a 21% downside to a 6% upside.

Investors are wondering if it’s safe to buy stocks at this time. History suggests it is, but elevated valuations and uncertain economic conditions have some analysts concerned. Personal comfort with risk tolerance should guide investment decisions during these uncertain times.



Read more at The Motley Fool: The S&P 500 Just Hit a Record High. Is It Safe to Buy Stocks Right Now?