S&P 500 Investors Urged to Stay Long Term Despite 29 Times Earnings
Updated
Updated · Yahoo Finance · Aug 25
S&P 500 Investors Urged to Stay Long Term Despite 29 Times Earnings
3 articles · Updated · Yahoo Finance · Aug 25
Summary
29 times earnings, the S&P 500 looks historically expensive, but the report argues investors should keep a long-term strategy rather than shift cash into CDs or T-bills.
About 10% average annual total returns since 1957 underpin that case, along with the index’s quarterly rebalancing that adds fast-growing winners and removes weaker companies.
$1,000 invested in the S&P 500 at the start of 2007 with dividends reinvested would be worth about $7,650 today, versus roughly $2,500 for a 20-year Treasury.
Three major drawdowns — 57% in 2007-09, 34% in early 2020, and 25% in 2022 — show the index can be volatile, but the piece says patient investors have still been rewarded over time.