U.S. stocks are back at record highs. Is it too late to chase the bull market?
For the first time in nearly four weeks, the S&P 500 tallied a fresh closing high on Tuesday. Investors who have kept some or all of their portfolios on the sidelines over the past couple of years might be wondering: Is it too late to get in on the action?
After two years of blockbuster gains, it is understandable that investors might want to weigh the risks of getting in now against waiting for a pullback. As they like to say on Wall Street, “trees don’t grow to the sky” — meaning that nothing rises in a straight line forever.
New stock-market highs can have a considerable effect on investors’ psychology. But history suggests there is nothing really remarkable about them. According to figures supplied by Ryan Detrick, chief market strategist at Carson Group, the S&P 500 SPX has hit a new record high, on average, once every three weeks since the modern incarnation of the index was created in 1957.
That doesn’t mean stocks haven’t suffered prolonged stretches of losses along the way. But the data show that bear markets have been relatively rare, and investors who sit on the sidelines waiting for a pullback often miss out on significant gains.
“Should you buy when stocks are [at] all-time highs? That’s a popular question we often get,” Detrick said in a post on X. “My take is don’t be scared of new highs, as the S&P 500 is up a year later 71% of the time after an [all-time high] and up a median of 8.3%. In other words, about normal returns.”
Of course, this isn’t always the case. The S&P 500 hit a record high of 4,796.56 on Jan. 3, 2022, before ultimately falling 25% to its bear-market nadir in October of that year. It took more than two years for the index to surpass its previous record.
But bear markets such as the one investors endured in 2022 are the exception, not the norm. Over time, stocks usually rise. That has been particularly true since the recovery from the 2008 financial crisis began in early 2009.
Still, investors who are interested in a more comprehensive analysis should consider the following risks.
Over the past few months, new threats have emerged that some say could trip up the market. Those threats have arrived at a particularly precarious time for markets, both because U.S. large-cap valuations are extremely high relative to history and because seasonal patterns show that the first quarter of a new presidential term is among the weakest in the entire four-year cycle, according to Detrick.
See: The biggest U.S. stocks haven’t been this expensive since the dot-com era. That’s making investors nervous.
The arrival of China’s DeepSeek artificial-intelligence program has challenged critical assumptions about American dominance in AI. President Donald Trump’s mercurial trade agenda has kept investors guessing, leaving markets vulnerable to headline risk, while the government-job cuts ordered by the new administration have revived questions about the resilience of the U.S. labor market.
The Federal Reserve has hit pause on its planned interest-rate cuts. And finally, the Philadelphia Eagles won the Super Bowl. This last example might not seem particularly relevant to investors, but in the past, a Philadelphia victory in either the Super Bowl or World Series has preceded turmoil in the economy or financial markets with surprising regularity.
So far, investors have taken these obstacles in stride. But just because these risks haven’t driven investors from stocks yet doesn’t mean it can’t still happen.
While the megacap tech stocks known as the Magnificent Seven have struggled as a group since the start of 2025, other stocks have helped pick up the slack, causing the rally to broaden out and making it — at least in theory — less vulnerable to risks affecting individual stocks like Nvidia Corp. NVDA.
That doesn’t mean the S&P 500’s current top-heavy concentration can’t still cause problems. In late January, shares of Nvidia fell 17% in a single session, causing the index to drop nearly 1.5%, even though more than 350 other S&P 500 stocks rose.
The sluggish performance of the Magnificent Seven has contributed to a slowing of the S&P 500’s advance since the start of 2025. But Detrick and others contend that stronger performance for other, smaller stocks means the rally is finding itself on more secure footing. The index has risen 4.2% year to date as of midday Wednesday. The Invesco S&P 500 Equal Weight exchange-traded fund RSP, which is considered a better representation of the performance of the average S&P 500 stock, has gained 4%, according to FactSet data.
Exactly five years ago, on Feb. 19, 2020, the S&P 500 hit its final record close before global financial markets were upended by the advent of the COVID-19 pandemic. Since then, the index has gained more than 80%, according to FactSet data. By the end of the summer of 2020, all of the losses from the COVID-inspired selloff had been erased.
U.S. stocks were trading lower on Wednesday, with the S&P 500 down 6 points, or 0.1%, at 6,122 in recent trading, while the Nasdaq Composite COMP was down 53 points, or 0.3%, at 19,990, and the Dow Jones Industrial Average DJIA was down 144 points, or 0.3%, at 44,413.