Should You Invest as the S&P 500 Hits Another New High? Here's What History Says.
Key Points
The market will eventually come down, but it will only lose a percentage of its value.
The S&P 500 has gained 715% since the mortgage crisis in 2008.
Investing consistently over time is important, since you won't know when the market will reach its highs, and you want to benefit from compounding over time.
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Despite geopolitical conflict, fluctuating oil prices, and macroeconomic volatility, the S&P 500 (SNPINDEX: ^GSPC) continues to reach new highs. It's up almost 8% this year, the fourth in a row with gains.
It's not the first time there's been such a streak, and anything could change for 2026 with most of the year still ahead. Should investors be worried? There's historical precedent for continuing to invest as the market keeps rising.
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What goes up can keep going up
Investors should keep in mind that no matter how long the streak lasts, it will come to an end at some point. And while no one can say with any certainty how long this bull market will last, pullbacks are part of the process — two steps forward, one step back. Even a correction or a crash, only erases a fraction of the gains.
The last time the S&P 500 had an annual loss, for example, in 2022, it lost 19% of its value. Since then, it has gained 92%.
The worst year in recent memory was 2008, during the mortgage crisis, when it lost 38% of its value. It's gained a whopping 715% since then.
These are resets, and although they can look scary, they present great buying opportunities for confident and patient investors.
Image source: Getty Images.
Should you invest at the top?
So does it make sense to stop investing right now? Of course not, for the simple reason stated above: When it corrects, it'll only take a portion of its value with it. No one knows how much higher it could go or how long the run will last. You don't want to lose out on those gains.
One of the most important values in long-term investing is consistency. Keep feeding your portfolio so your investments can compound over time.
For example, let's say you started with $10,000 and invested $100 monthly in an S&P 500 index fund over the past 30 years. The market has gained about 11% annualized over the past 30 years or so, which means you would have $500,000 today.
That's investing in a fund that tracks the S&P 500. If you were to create your own winning portfolio, you might do even better. And that's only investing $100 a month, or $1,200 a year. If you could increase that to $500 a month, or $6,000 annually, you'd have more than $1.4 million at the end of 30 years tracking the S&P 500 consistently, through good times and bad.
So while you should be more careful about which stocks you pick when the market is at a high, making sure you're being mindful about valuation and not getting caught up in hype, you should certainly keep investing.
Should you buy stock in S&P 500 Index right now?
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Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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