The S&P 500 hit record highs on five consecutive days. Can the S&P 500 continue to hit record highs? Investors should stay invested despite all-time highs, analysts at UBS say.
Returns following record highs are positive. Over the past 60 years, in the one, two, and three-year periods following a new all-time high, S&P 500 returns have averaged 12%, 23%, and 39%, respectively. This is very similar to the 12%, 25%, and 38% average returns for all other periods over the same time frames.
In addition, the S&P 500 trades within 5% of a record high 60% of the time, and only 12% of the time more than 20% below its last all-time high. The cost of waiting for a pullback can be quite high.
The current conditions remain positive for further equity gains. A solid start to the fourth quarter US reporting season supports our forecast for 8% earnings per share growth from S&P 500 companies this year.
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