On Monday, the S&P 500 recorded its 51st all-time high of the year. If that sounds impressive, it is! Since 1950, only 7 years have had more all-time highs, and with over a month to go, 2024 could climb even higher in the rankings.
A little historical perspective:
Out of the 75 years since 1950, 48 have featured at least one all-time high—a solid hit rate of 64%. However, it’s rare to see this many all-time highs. This year marks just the 8th time we’ve seen 50 or more, and only in 1954 and 1995 did the S&P 500 post a greater return than we’ve seen so far in 2024.
So, what does this mean moving forward? Historically, years following 50 or more all-time highs have been mixed. The S&P 500 was positive just 43% of the time, with a median return of -0.7%. While this isn’t a reason to abandon equities, it does serve as a reminder of the strength we’ve seen this year and the string of favorable returns in recent years.
Looking ahead:
Investors have become accustomed to strong performance from U.S. Large Caps, but at some point, a shift will be necessary. When the time comes, finding sources of excess returns in alternatives and noncorrelated strategies will be crucial for a well-rounded financial plan. While I believe we can continue to move higher for now, it’s wise to consider diversifying beyond traditional equity markets.
