Investing.com - S&P 500 Nears Record High: Should You Invest Now?
The S&P 500 is on the brink of hitting a new record high, leaving investors with mixed feelings. While current investors are enjoying the market's strong performance, those waiting for a dip may be feeling anxious. UBS analysts reassure investors that all-time highs shouldn't be a cause for concern.
According to UBS, historical data shows that investing in the S&P 500 isn't as risky as perceived. In fact, 28% of the time, investors wouldn't have experienced any losses, including dividends. Surprisingly, the risk of drawdowns is lower when investing at all-time highs, with 32% of investments made at these levels not seeing any losses in the future.
UBS advises investors to focus on balanced portfolios that include both stocks and bonds to minimize losses. They recommend a systematic investment approach rather than trying to time the market, suggesting techniques like dollar-cost averaging. Additionally, reallocating excess cash into high-quality corporate bonds can help prepare for potential interest rate declines.
The current economic landscape, with declining inflation and expectations of Federal Reserve rate cuts, is expected to support both equities and bonds. Despite challenges in China, UBS sees stabilization through infrastructure spending and policy measures, recommending a focus on defensive sectors within Chinese equities.
In summary, investing at all-time highs may not be as risky as it seems, especially when adopting a balanced approach and utilizing investment strategies recommended by UBS. By understanding the historical data and market trends, investors can make informed decisions to protect and grow their wealth.
