Investing in Stocks At All-Time Highs | The Mesh Report

Investing in Stocks At All-Time Highs

Dividend Sensei December 31, 2020 Comments Off on Investing in Stocks At All-Time Highs

I feel pretty comfortable in saying 2020 has to be the only time in history where the U.S. stock market has hit 30 new all-time highs (and counting) during the same year as a pandemic and the worst quarterly GDP drop in history.

Since reclaiming the highs from 2007 following the Great Financial Crisis, the S&P 500 has now seen more than 270 new all-time highs. That’s roughly 14% of all trading days in that time where stocks have closed at an all-time high.

Over the past 100 years or so the stock market has hit all-time highs on around 5% of all trading days. So it makes sense those new highs tend to cluster during a bull market when you have droughts as we experienced from October 2007 through March 2013 with nada.

This is one of the reasons investing at all-time highs can play head games with you. Invariably, one of those all-time highs will be THE high, at least for a while.

You can see just from eye-balling a long-term chart of the S&P 500 that there have been extremely long wait times where the market was underwater from a previous peak:

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