S&P 500 just hit a record high. Is it safe to buy stocks?
The S&P 500 hit a new record high of $5,523,64 on June 28, 2024.
On a recent trip to Nashville, I got chatting with a data scientist who told me he’d been betting against the stock market for the past few years.
He couldn’t bring himself to buy stocks at these levels. He thinks they’re overvalued.
I know many others like him who’ve largely avoided stocks ever since the ’08 crisis. Mistake. Every $100 invested in the S&P 500 near the bottom in 2009 is worth $800 today.
Stock market crashes happen, and they hurt. But investing like the next big one is always around the corner is a surefire way to fall behind financially.
US stocks have gone up in three of every four years stretching back to WWII.
I think folks who constantly anticipate a crash misunderstand investing. You’re not buying lottery tickets. You’re buying pieces of businesses.
And great businesses tend to grow their profits over time, which means investors are willing to pay up for their stocks. This is why the line on the chart (mostly) goes up for the market as a whole.
Maybe this is obvious to you. But many very smart people are too quick to scream “stock market bubble,” and it’s costing them dearly.
How safe is it to buy stocks at all-time highs?
Contrary to what you may think, buying stocks at all-time highs is actually better than buying them on any other day.
Here’s a quick historical analysis for the S&P 500:
LESSON: Don’t fear record-high prices. New all-time highs are simply a stepping stone to more new highs.
Continue investing in great businesses that can keep growing year after year. That’s what we do at Risk Hedge.
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I publish fresh research on stocks and crypto every M/W/F.
