How often is the Stock Market at ‘All Time’ Highs?
We hear it in the news quite often these days:
“The stock market is at “all time highs!! Move to cash!!”
But have you ever thought about exactly how often the market’s at “all time highs?”
Maybe it’s not that uncommon.
Since 1950 to now, roughly 1 out of every 15 days the market was open, it has closed at a new high level (roughly 6.7% of all trading days).
The S&P 500 has spent roughly 32% of its life within 5% of its (up to then) all time high and 24% of its life within 2% of its (up to then) all time high. That’s often!
See below for what kind of returns we experienced following an all time high, for the past 100+ years in the US stock market:
Yes, absolutely the stock market is at all time highs. This is the second longest bull market in the US market’s recorded history. But during an extended bull market like we’re in, by definition, it’s constantly making new highs. More often than not, highs, follow even more highs!
Does this mean that we can be rest assured that there is no bear market on the horizon? Well, that’s not true either. Of course there’s a bear market in the horizon! But no one knows when the next bear will hit. So until then, it’s important not to be fearful of the market being at high valuations. Keep plowing in, stay diversified, and don’t attempt to time the market!
“If you think the market’s “too high” wait ’til you see it 20 years from now.” – Nick Murray
What are you currently doing with your portfolio? Are you putting money in or staying on the sidelines? Any thoughts on where the market is headed from here?