Record High, Record Worries, Part II
Standard and Poor’s (S&P) first introduced the S&P 500 index in March 1957, creating a benchmark of the American stock market that tracks the value of 500 corporations listed on the New York Stock Exchange and the Nasdaq.
Since then, the index has made 1,186 new all-time highs — a new high every 14 trading days. It is interesting to note that most of these new highs were clustered around just three secular bull markets.
Almost all (96.4%) of all new highs took place in 61% of those years since 1957. (1958-1968, 1980-2000, 2013-Today.)
All-time highs lead to a continuation of the bull market 99.2% of the time. 0.8% of the time, it signals the end of the bull market. This is why trying to time the market typically puts you on the wrong side of the trade as the probabilities are heavily in favour of the market continuing its advance.
This study shows that buying after an all-time-high has occurred produced higher returns historically, as compared to “buying-the-dip”, defined as buying after a -20% market decline.
At GYC, our investment philosophy is focused on putting risk first. This is demonstrated in the way we build extreme diversification into our portfolios, our daily investment process, and investment protocols. These are built upon inputs from our Risk Matrix which is designed to signal to us impending deep catastrophic losses.
If you would like to know how we can help you manage your money with a peace of mind, read on.
Most of us would trust an accomplished physician to manage our health. After all, physicians have specialised training, real-world experience and access to tools outside the reach of the general public. Most importantly, they took an oath to prioritize the patient’s health over their own interests.
In the same fashion, GYC espouses the same expertise in markets as good physicians do with health care. In addition, we adapt insights from financial science to develop a financial plan that is built upon a rigorously tested investment philosophy.
Click here to schedule an exploratory chat with us as we discuss how we can work hand in hand with you to accomplish each of your unique goals.