The S&P 500 Index recently hit another historical high1. Is it therefore time to exercise more caution? Not in our view. We see the potential for further upside.
Average 1-, 3- and 5-year forward returns.
It has certainly been a volatile first half of the year for equity markets with uncertainty around tariffs and the administration’s other policies weighing on investor sentiment. From February 19 to April 8, the S&P 500 fell a notable 19%, skimming the surface of bear market territory. However, since then the index has risen 26% to a new all-time high on July 3.
While some investors may not feel comfortable buying when markets are at new highs, history shows there is little difference between future returns following a new all-time high and future returns following any other day when the market has not registered a new high. Since 1950, the S&P 500 has delivered strong returns in the forward 1-, 3- and 5-year periods from a new all-time high. We believe that one of the reasons is the day of an all-time high is just like any other trading day, and investors are best served by viewing them all through the same lens.
Our view is that an all-time high shouldn’t be a reason to stay on the sideline. Rather, stay invested and diversified and maintain a long-term perspective. We believe that focusing on a long-term plan rather than short-term market movements is the best strategy for building wealth
i As of July 1, 2025
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