Buying stocks at all-time highs still returned 10.5% a year since 1950 — here's why boomers should hold steady

Moneywise and Yahoo Finance LLC whitethorn gain committee oregon gross done links successful the contented below.

With trillion-dollar IPOs and a banal marketplace astatine oregon adjacent an all-time high, it mightiness look similar present is the "worst" clip to invest.

After all, the S&P 500's Cyclically Adjusted Price-to-Earnings (CAPE) ratio is astatine 42 arsenic of July 10 (1), the highest level since the dot-com bubble, and high-profile stocks similar SpaceX person been trading astatine price-to-sales ratios of 110 (2). Putting your wealth successful the marketplace present seems similar the other of the accepted buy-low, sell-high mantra.

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Add to that President Donald Trump's unpredictable economical and geopolitical argumentation moves, and it's casual to spot wherefore galore investors mightiness beryllium feeling anxious. For retirees and babe boomers, this mightiness consciousness similar the close clip to question safety. But caller analyses mightiness easiness immoderate of those concerns.

Here's wherefore humanities information suggests a counterintuitive determination during times similar this.

Patience is rewarded, adjacent astatine all-time highs

In 1 caller study, RBC Global Asset Management (3) studied marketplace returns from 1950 to mid-2025 and recovered that stocks deed 1,325 all-time highs implicit that period. That's an mean of 17 times annually.

In different words, you tin expect to spot hyperbolic headlines astir the marketplace breaking a grounds astir erstwhile oregon doubly a month.

But the squad took their investigation a measurement further by comparing the show of a hypothetical capitalist who lone purchased stocks astatine all-time highs. This capitalist underperformed the marketplace mean implicit this play — but not by much.

For instance, the five-year mean instrumentality of the S&P 500 betwixt 1950 and 2025 was 11.4%. The capitalist who lone deployed currency erstwhile the marketplace was astatine an all-time precocious experienced a 10.5% annualized instrumentality implicit the aforesaid period. Simply put, the "buy-and-hold" strategy works careless of marketplace sentiment and valuations.

Similar probe by Raymond James (4), an concern absorption firm, recovered that a caller all-time precocious is highly apt to beryllium followed by affirmative guardant returns, particularly if it's pursuing a marketplace drawdown.