Overview
- U.S. stock indexes have recently hit fresh all-time highs, which has renewed worry among investors about buying near a market peak.
- Historical case studies using YCharts data show that investors who bought at the March 2000 dot‑com peak or the October 2007 pre‑recession peak and stayed invested later earned very large cumulative returns.
- Those long-term gains came after severe interim losses — for example, an S&P 500 ETF bought in October 2007 fell about 55% during the Great Recession before later recovering and producing large total returns.
- Financial advisers recommend practical steps to manage peak risk, including broader diversification (equal-weight or non-U.S. stocks), shorter-duration or income-focused bonds, holding cash reserves, and using low-cost ETFs.
- Policymakers have responded with an expanded Treasury program to buy long-term bonds in August to try to ease upward pressure on long yields, but the purchases are small relative to overall issuance and their market impact is uncertain.