Why does news of market highs make us feel like we should change our strategy and pause investing?

If you’ve ever hesitated to invest at a market high, you’re not alone.

Fear at that time is normal. We tend to believe that there is an inevitable downturn, and we need to wait.

But here’s what the data shows: buying at market highs has historically delivered returns similar to investing on any random day.

The average 1-year return after a market high? 11.2%.

On other dates? 12.6%.

A 3-year return after a market high is 10.9%, while it is 11.5% on other dates.

And at 5-year marks, the return after a market high is 10.3% versus an 11.3% on other dates.

With that being said, past performance doesn’t predict future results.

But the numbers do make a case that market highs aren’t a reason to pause investing.

It’s not about timing the market. It’s about trusting a long-term plan.

Feeling nervous? That’s human. But you don’t have to figure it out alone. Contact us today!

https://www.rbcgam.com/en/ca/learn-plan/investment-basics/investing-at-all-time-highs/detail

Bloomberg, RBC GAM. Data for S&P 500 as of January 1, 1950 to March 2024. All-dates refers to rolling 1-, 2- and 3-year returns starting from each trading date during this time. Returns in U.S. dollars. An investment cannot be made directly into an index. The graph does not reflect transaction costs, investment management fees or taxes. If such costs and fees were reflected, returns would be lower. Past performance is not a guarantee of future results.