The stock market in 2024 is experiencing a record year. Investors who haven’t jumped on this bull market are afraid of missing out, while those already invested are worried about the approaching end of growth. However, history shows that investing even at the historical highs of the S&P 500 index can bring profits.
Analyzing historical data reveals surprising findings. The S&P 500 index, tracking the 500 largest American companies, tends to keep growing even after reaching a peak. On average, the index increased by 14% in the year following its peak.
Even more optimistic results are shown by long-term analyzes. According to JPMorgan, the S&P 500 index traded 50% and 80% higher on average three and five years after reaching its peak, respectively. These results are well above the average returns from everyday investing.
Investing in an index fund, such as the Vanguard S&P 500 ETF (VOO), is an effective tool for diversifying your portfolio and reducing risk. The fund tracks the performance of the S&P 500 index with minimal fees and allows investors to profit from the growth of the entire market.
Although the fear of heights is natural, history shows it is often unfounded. Don’t hesitate to invest in the S&P 500, even when the market peaks.
Investing in stocks is an effective way to grow your money. While investing at the highs of the S&P 500 index carries some risk, history shows that this risk is offset by potential gains.
It is important to invest wisely and with regard to your individual needs and risk tolerance.
Always consult a qualified financial advisor before making any investment decisions.
Source: The S&P 500 index, Peniaze24
