Financial Planning Fridays #75: Investor Patience Pays Off

On October 27th, the S&P 500 bottomed out at 4,117 after experiencing a 10% correction throughout the fall. 

At that point, the S&P 500 was effectively at the exact same point that it was 30 months prior, on April 9th, 2021. Over 2 and a half years of limited performance from the S&P 500.

From that point, however, we experienced a phenomenal rebound and finish to the year.


In fact, on January 19th, after testing our patience, the S&P 500 finally closed at a brand new all-time high. The next day it proceeded to make another all-time high. And another the day after that, and the day after that. And, as of this recording, it has continued to move higher and set new records.

After that extended wait, we began to wonder: Is a long time between all-time highs a sign of good things or bad things to come for the market? So we went back and reviewed all the times since the Great Depression that we had to wait  one year or longer to wait for a new all-time high to be made. We had to show a lot of patience and discipline during these times to remain invested without seeing any gains. 



However, history shows that being patient with our investments has paid off.  After waiting more than a year for a new high to be made – the market has tended to continue to move higher. In fact, it has had a positive average return one, three, six, and 12 months later. n addition, and perhaps even more importantly, it was higher 93% of the time 12 months later with an average return of 14% after that new high was made. 

Now, we had to maintain our discipline for two plus years while the market battled back, but it’s once again restarted its upward trend, and history shows our patience is likely about to pay off. 

Be on the lookout for our next Financial Planning Fridays episode. Subscribe to our Youtube Channel so you never miss an episode. Or contact us directly; schedule your 15-minute call with us today.