All-Time Highs: Is it all Downhill from Here? 

Chris Kamykowski, CFA, CFP® – Head of Investment Strategy and Research

Early 2024 has seen all-time highs in the equity markets seem as frequent as Taylor Swift sightings at Kansas City Chiefs’ football games. Multiple new record highs by the S&P 500 have hit in quick succession with 13 between January 19th and February 23rd. Even non-US markets experienced new market tops with Europe’s Stoxx 600 hitting a record high and Japanese Nikkei 225 finally surpassing its peak set over 34 years ago.  Both the S&P 500 and Stoxx 600 recorded their last record highs over two years ago in January 2022.

To be sure, the breadth of the S&P 500’s advance remains concentrated, with the top 10 stocks accounting for 65% of this year’s surge compared to 62% in 2023.  US large-cap growth — led by Nvidia — continues to carry the load with a 9.6% return versus US large-cap value’s 2.9%, as of 2/26/2024. 

Despite the concentration, a record is a record, and it leaves investors to question “What now?”.  Before giving into the temptation to sell at the peak, does history argue for or against such a move?  The answer may surprise investors.

Key to this question is defining what constitutes an all-time high (ATH) for the S&P 500.  For this piece, we define an ATH as a new record that occurred at least twelve months since the previous ATH. 

Using this definition and excluding the most recent period underway, 13 of the 14 ATHs occurring since 1954 experienced positive returns averaging 13% twelve months forward, with individual time period returns ranging from as low as 3.6% (1972) to as high as 41% (1954).  The Global Financial Crisis took hold following the May 2007 ATH, creating the group’s outlier as markets were down -9.5% twelve months later.

Source:  Morningstar; S&P 500 PR USD as of 2/26/2024
*All-time high marked after 12 months have passed since previous S&P 500 all-time high.

It is noteworthy that the S&P 500 did not simply keep ascending in any of the 13 positive periods following an ATH, as evidenced in the maximum drawdown column.  Instead, markets experienced varying degrees of downside volatility (an ever-present investment risk), with an average maximum drawdown of -8.2%. This should be of no surprise based on historical statistics which show markets endure at least three 5% declines and at least one 10% drop in any given calendar year.

Source:  Morningstar; S&P 500 PR USD. Average frequency assumes 50% recovery rate of lost value. Average length measures market high to market low.


Whether it has been several years since the markets’ last all-time high or just a few days, records will come and go.  As has been shown here, using a record close as a signal to trade out of the market could risk missing further upside in the following twelve months.  Ultimately, days in the market matter much more than attempting to time investments, and history has shown that missing the single best-performing days substantially reduces annualized returns.  Maintaining consistent investment in the markets — with rebalancing around one’s strategic asset allocation targets – enables long-term capital appreciation, mitigates the risks associated with trying to time market movements, and has proven more resilient and conducive to sustained growth over time.





The S&P 500 PR Index is a free-float capitalization-weighted index of the prices of approximately 500 large-cap common stocks actively traded in the United States.


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