Should You Hold Off When Markets Reach New Highs?

by Mary Suplee on Oct 19, 2018

I often get questions about whether it’s a good time to invest when the markets are reaching new highs. Look at the illustration of the S&P 500 below  from Dimensional Fund Advisors. On average, when the market closes at a monthly high, it is even higher over 80% of the time in the next one,three,and five years. What is particularly interesting is that the number is almost the same as if the index did not hit a new high.

The Role of Volatility

by Mary Suplee on Oct 12, 2018

This interesting slide that I just received from J.P. Morgan was a good reminder of the role that market volatility plays in achieving long term investment goals. The red dot shows the largest decline in any year and the gray bar where the year ended. The average inter year decline since 1980 was 13.8%. The most amazing one to me is 1987 where it was down 34% and ended up 2% for the year.

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