There’s something counterintuitive about getting into the market at an all-time peak. After all, the mantra in investing is “buy low, sell high.”
Market watchers would be quick to point a few things out on this front. For one, just because the market is at a high doesn’t mean it doesn’t have the potential to go higher. In fact, the S&P 500 has been in bull mode some 85% of the time since 1950, and returns tend to be better than average for investors who got in at times similar to these.
Friday’s trading marked the seventh time in history that the S&P 500 took more than two years to make a new all-time high, according to Goldman Sachs. In the 12 months following each of those incidents, the index has returned 13% on average, compared with a 7.8% average return without conditions.
You don’t have to think too hard for it to make sense. The stock market has historically trended up. That means that, during bull markets, all-time highs eventually beget new all-time highs.
If we’re in the beginning of a new bull run, “this would not be the time to hit the snooze button,” says Jon Ulin, a CFP and CEO of Ulin & Co. Wealth Management in Boca Raton, Florida.
