Stock prices have been surging. Have you already missed your chance to buy?
After a rocky couple of years, the stock market has been surging in recent weeks. The S&P 500 is up by more than 12% since late October alone, and it's soared by just over 20% since the beginning of the year.
While this has many investors feeling optimistic about the future, others are concerned that they've missed their best chance to buy. Many stocks are more expensive now than they were just a couple of months ago, and investing now could mean paying a premium.
With prices still on the rise, is it too late to invest in the S&P 500? And should you hold off on investing in case stock prices fall again soon? The answer could surprise you.
Image source: Getty Images.
When is the right time to invest in the stock market?
The market has been volatile over the past couple of years, and it's tempting to try to invest at just the right moment. If you're able to invest when prices are at their lowest and then sell when the market peaks, you could make a hefty profit.
However, timing the market accurately is incredibly difficult -- even for the experts. Nobody knows what the market will do in the short term, so it's impossible to know when stock prices have bottomed out or whether they'll fall again in the coming weeks.
Over the long term, though, the market is overwhelmingly consistent. Despite experiencing plenty of crashes, corrections, recessions, and other downturns, the S&P 500 has still earned positive total returns over decades.
In the past two decades alone, the market has faced everything from the dot-com bubble burst to the Great Recession to the COVID-19 crash and the most recent slump, along with countless smaller downturns along the way. Yet the S&P 500 is still up by nearly 215% since 2000.
^SPX data by YCharts
Over the long haul, there isn't necessarily a bad time to buy. Even if you had invested when prices were at their peaks immediately before a downturn, by simply holding your investment for a few years, you'd still have recovered your losses and gone on to see positive total returns.
This is a consistent trend with the S&P 500 throughout history, too. Analysts at Crestmont Research looked into the S&P 500's rolling 20-year total returns to see how many of those 20-year periods ended in positive total returns.
They found that every single period in the index's history resulted in positive gains. In other words, if you had invested in an S&P 500 index fund or ETF at any point and held it for 20 years, you'd have made money -- even if the market was extremely volatile in that time.
The key to keeping your money safe
Investing in an S&P 500-tracking fund is one of the simplest and most effective ways to keep your money safer. The index itself has a long history of earning positive returns over time and recovering from downturns. While there are never any guarantees when it comes to investing, opting for an S&P 500 index fund or ETF is about as close to guaranteed long-term returns as you can get.
It's not the only way to build wealth in the stock market, however. If you choose to invest in individual stocks, you can potentially earn far more than you could with an index fund. It's crucial, though, to ensure you're investing in the right places.
Not all stocks will be able to recover from downturns, but the ones with healthy fundamentals (such as a competitive advantage, strong financials, and a knowledgeable leadership team) have the best chances. Even if the market takes a turn for the worse, these types of stocks are the most likely to recover.
When the market is surging, it can be tough to know when to invest. The good news, though, is that there's never necessarily a bad time to buy stocks. As long as you're investing in the right places and keeping a long-term outlook, right now is a fantastic time to invest in the stock market.
FAQs
It's unclear where the S&P 500 is headed in the coming months, but the best thing you can do right now is to continue investing consistently. By keeping your money in the market for the long haul, you can minimize risk while maximizing your earnings potential over time.
Is it worth investing in the S&P 500 in 2024? ›
So far, 2024 has seen around 25 record highs. In years that the S&P 500 makes a new high, it usually makes around 30 on average. But, years like this one don't happen often, and they are likewise promising.
What are the 10 stocks the Motley Fool recommends? ›
See the 10 stocks »
Mark Roussin, CPA has positions in AbbVie, Alphabet, Coca-Cola, Microsoft, Prologis, and Visa. The Motley Fool has positions in and recommends Alphabet, Chevron, Home Depot, Microsoft, NextEra Energy, Prologis, and Visa.
Is Motley Fool stock Advisor better than sp500? ›
MY SUMMARY AS OF MAY 26, 2024:
The average return of all 530+ Motley Fool Stock Advisor recommendations since the launch of this service in 2002 is 703% vs the S&P500's 155%. That means they are now beating the market by OVER 4X since inception. They have a win rate of 66% profitable stock picks.
What are the best months to invest in S&P? ›
According to Reuters, since 1945, April and December are tied as the best-performing months of the year for stocks, with an average return of 1.6%. (September is notoriously the worst, with an average loss of -0.6%.) During recessions, April's positive performances can be even more pronounced.
What is the future prediction for the S&P 500? ›
Analysts project 11.5% earnings growth and 5.5% revenue growth for S&P 500 companies in 2024. Fortunately, analysts see positive earnings and revenue growth for all eleven market sectors this year.
Will 2024 be a bull or bear market? ›
The S&P 500 soared throughout the year and finally reached a new high in January 2024, making the new bull market official. The onset of a new bull market has historically been a very reliable stock market indicator.
How much will the S&P 500 be worth in 2030? ›
Stock market forecast for the next decade
| Year | Price |
|---|
| 2027 | 6200 |
| 2028 | 6725 |
| 2029 | 7300 |
| 2030 | 8900 |
5 more rowsApr 26, 2024
Investing in an S&P 500 fund can instantly diversify your portfolio and is generally considered less risky. S&P 500 index funds or ETFs will track the performance of the S&P 500, which means when the S&P 500 does well, your investment will, too. (The opposite is also true, of course.)
What stock will boom in 2024? ›
2024's 10 Best-Performing Stocks
| Stock | 2024 Return Through May 31 |
|---|
| Super Micro Computer Inc. (SMCI) | 175.9% |
| Trump Media & Technology Group Corp. (DJT) | 180.5% |
| Avidity Biosciences Inc. (RNA) | 196.8% |
| Novavax Inc. (NVAX) | 213.1% |
6 more rowsJun 3, 2024
The Motley Fool has positions in and recommends Alphabet, Amazon, Microsoft, and UiPath. The Motley Fool recommends Alibaba Group and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft.
Does Motley Fool recommend penny stocks? ›
Penny stocks tend to be much riskier than other stocks.
Plus, they are often shares of unproven companies, where there's a very real risk of losing your entire investment. In other words, they simply are not worth buying for most people who want to invest in the market to take a reasonable risk and build wealth.
Does Warren Buffett outperform the S&P? ›
Warren Buffett has an incredible track record of outperforming the S&P 500. At the start of every Berkshire Hathaway (BRK. A 0.37%) (BRK.
Which is better Zacks or Motley Fool? ›
Zacks caters to quantitative, short-term traders. Motley Fool appeals more to fundamental, long-term investors. Ultimately there is no definitive “better” service. It depends entirely on your personal investing style and preferences.
Does Motley Fool outperform the market? ›
So, what is the BIG secret? The secret is that the Motley Fool is here to help you pick winning stocks. And our experience being a Stock Advisor subscriber over the last 8 years proves that they have consistently beat the market. Their stock picks from 2016 thru 2023–that's 192 stock picks–are up an average of 94.8%.
Should I buy index funds now? ›
Is now a good time to buy index funds? Any time is good for investing in index funds when you plan to hold the fund for the long term. The market tends to rise over time, but not without some downturns along the way, thanks to short-term volatility.
Is now a good time to invest in the stock market? ›
Stock prices have surged significantly over the past 18 months. The S&P 500 is up by 45% since it bottomed out in October 2022, while the tech-heavy Nasdaq has soared by a whopping 58% in that time. Investing now, then, means paying much higher prices than you would if you'd bought a year or two ago.
Should I invest in Nasdaq or S&P 500? ›
A detailed analysis of their annual total returns, including reinvested dividends, reveals that the Nasdaq-100 Total Return™ Index has exceeded the S&P 500 in 12 out of these 16 calendar years, achieving an impressive average annual return of +18.2%.
What is Warren Buffett buying? ›
Which stocks is Warren Buffett buying?
| Company name & symbol | Percent change in share count over last quarter |
|---|
| Chubb Limited (CB) | New |
| Liberty SiriusXM Group — Series A (LSXMA) | 62% |
| Liberty SiriusXM Group — Series C (LSXMK) | 52% |
| Occidental Petroluem Corp. (OXY) | 2% |
May 22, 2024
