Over the long term, the stock market tends to rise, meaning that new highs are a natural part of its growth cycle. In 2024, the S&P 500 has already hit record highs 57 times, reflecting behaviors seen in previous high-performance years, like 1995 with 77 new highs. This long-term uptrend suggests that investing at peak market levels has historically resulted in significant returns, contrary to the apprehensions many investors feel about making such moves.
Historical data shows that the S&P 500 often delivers strong performance after hitting new highs. Between 1970 and 2020, investors who bought stocks at a record high saw an average five-year return of nearly 79%, significantly more favorable than buying randomly during that period, which yielded 71%. This underscores the idea that timing the market by waiting for dips may not provide the optimal investment strategy, especially for long-term gains.
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