The S&P 500 Just Hit a Record High. Is It Too Late to Buy?

On Monday, the S&P 500 (SPX) closed at an all-time high of 7,174, bringing its return since the end of March to 13%. The V-shaped rally has “locked out” many investors who may be too cautious to buy given elevated stock prices.

Claim 55% Off TipRanks

However, that approach may be flawed. The median one-year return for buying the benchmark index at a record closing high versus buying it on any other day is practically identical, tallying at 9.6% and 9.5%, respectively, according to data going back to 1928 compiled by Yahoo Finance.

Timing Matters Less Over the Long Run

The two- and three-year returns for buying the S&P 500 on non-record days are slightly higher than the returns for buying on record days. However, the returns almost even out by year four, and by year five, the median S&P 500 gain was roughly 44% after record highs, compared with 47% following non-record closes.

The data suggests that, based on historical price action, it is absolutely not too late to buy if you have a long-term mindset. It also supports the idea that timing the market may be less important than staying invested.