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The S&P 500 (^GSPC) has been hitting new highs every day for the past week.
And while investors may be nervous about buying benchmark indexes at all-time highs, eToro US investment analyst Carey Cox’s historical charts suggest there’s never been a better time to enter the market. It shows that there is no
This graph shows that money invested at all-time highs performs better over the next year, on average, than money invested on any given day.
“History has shown us time and time again that all-time highs usually lead to more all-time highs,” Cox told Yahoo Finance.
Cox said the market has been pretty standard over the past week, with the S&P 500 hitting a new all-time high and continuing to make new highs in the days that followed. About 80% of S&P records since 1950 have at least one new all-time high in the following week, according to Cox’s analysis.
“A lot of people think that markets go up and down, so once the market hits an all-time high, “Of course it will go down,” he said. “And that’s not how markets really work. Markets generally go up. There are just times when they go down.”
Mallouk says investor sentiment often shifts to a simple theory: What goes up must come down. But this goes against the general trend of broad stock indexes, which tend to trend upward over the long term.It may not feel like it since it just took the market almost two years to make a new high, but markets generally Marouk said it hit a new high every 19 days.
“The key is to put the money in,” Marouk said. “If you sit on the sidelines, you’re likely to end up in a much worse situation than someone who was investing and happened to run into a doubt market right after investing.”
And for many, the current market environment still has the potential for the market to rise further before falling. The S&P 500 officially entered a bull market in June. However, the bull market’s all-time high was just recorded in January. History shows that since 1950, bull markets have lasted an average of four and a half years after stocks hit their first new high. And it goes without saying that long breaks between record highs, like the one the market has just experienced, usually produce exceptional returns.
However, in the case of stocks, it has exceeded historical numbers. Cox emphasizes that the current economic backdrop is a bullish setup for stocks. The US economy just finished 2023 with another surprise on the upside of economic growth. Consumers are still spending, and the labor market remains tight, although there are some signs of cooling.
“The market is expecting a rate cut given the strong economy,” Cox said. “This is a very good setup for stocks.”
Josh Schafer is a reporter for Yahoo Finance.
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