Today, the S&P 500 closed at 4,027.81, up 1.42%. It last reached a high of 4,796.56 on January 3, 2022. By my calculation, that was 451 days ago. It has not returned to that high since, getting as low as 3,588.84 on October 11, 2022 and seeming to drift up and down in the 4,000 range (give or take a few hundred) over the past year. This has been the longest length of time without reaching a high I’ve personally experienced.*
A few years back, just before the Pandemic changed the world forever, I read an article about the frequency of the stock market hitting new highs. It turns out this happens quite frequently! I found this Forbes article suggesting that, as of 2015, the stock market hit new highs 6.96% of the time, which believe it or not averages out to about 25 days per year (!).
That’s pretty incredible, and suggests that more highs won’t be too far in the future. But what are the chances of us reaching them in 2023? Slim, as far as I can tell. People seem to expect the current bear market to last awhile (this article suggests it could end up being the longest on record!)
Regardless of what the future holds, I know I am earning my investing stripes by enduring the bear. It hasn’t been that fun at times, honestly, but I console myself by looking at the big picture as above. I also focus on silver linings such as these:
- Following bear markets, returns tend to be excellent (I wrote this post about this a few years ago).
- Bear markets are a great time to buy shares on discount! For instance, Vanguard’s Total Stock Market Index Fund (VTSAX) closed today at 97.33. Two years ago, on March 30, 2021, it was at 99.97. The long-and-short of it is that VTSAX has remained in this range, on average, over the last two years. As I wrote a few months ago, I was privileged to buy VTSAX in 2022 at 2021 prices!
Of course, when all else fails, there’s the tried-and-true m.o. of long-term investors: Stay the course. No matter what!
*But then, I was spoiled, as I started investing during the 2010s bull market.