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S&P 500 ETFs Are at Record Highs: What Should Investors Do Now?

July 18, 2025
09:53 AM
5 min read
AI Enhanced
economymoneystocksfinancialtechnologyhealthcaremarket cyclesseasonal analysis

Key Takeaways

The S&P 500 is up 7% year to date after plunging in April. Additionally, Investors are enthusiastic the state of the economy and its resilience in the face of tariffs...

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5 min read

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investment

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Published

July 18, 2025

09:53 AM

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The Motley Fool

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Key Topics
economymoneystocksfinancialtechnologyhealthcaremarket cyclesseasonal analysis

The S&P 500 is up 7% year to date after plunging in April

Additionally, Investors are enthusiastic the state of the economy and its resilience in the face of tariffs and inflation, and the gains are holding despite another round of new tariffs announced this week

The index recently hit new highs, and investors might be wondering what to do now

Is it a good time to buy S&P 500 exchange-traded funds (ETF)

Additionally, If you already own one, is now the time to sell

On the other hand, Ideally, when, you buy low and sell high

But that's an oversimplification for many reasons, in today's financial world

On the other hand, One is that it's not always what's low and high; you won't know when a stock has bottomed out, or how much higher it has to go

Furthermore, Every investor has to make decisions timing, but you can't time the market

Instead of focusing on the right timing, it makes more sense to focus on the fundamentals of the instrument, its opportunities and risks, and its general valuation

Nevertheless, That can help you determine when the timing works for you

Image source: Getty Images

At the same time, Since this is an ETF and not a stock, the fundamentals are going to look different than metrics revenue growth and operating margin

However, Here are some worthy tidbits to track: The market has gained an annualized average of 10

However, 7% over the past 20 years, or 700% in total (fascinating analysis), amid market uncertainty

Additionally, In an ETF that tracks the S&P 500 gives you exposure to 500 or so of the largest and best companies on the market, essentially giving you the opportunity to grow your money along with the market

The large number of stocks, plus the index's regular changing of its components based on how they grow or shrink, minimizes your risk

Additionally, However, Since index funds are passive instead of actively managed, the fees are generally quite low, so you keep more of your gains

The largest S&P 500 ETF is the Vanguard S&P 500 ETF (VOO -0 (fascinating analysis), amid market uncertainty

Furthermore, 08%), which has an expense ratio of 0, in light of current trends

Moreover, 03%, while the original ETF, the State Street SPDR S&P 500 ETF Trust (SPY -0. 10%), has an expense ratio of 0

Moving with the market Let's go through a bit of history to see how the S&P 500 has fared over a long time since that could help inform your decision. ^SPX data by YCharts Note how many times the index fell back from its high before reaching a new high over the past 30 years

However, My point isn't that you should expect the market to fall again, although you should; that would be the argument against buying now

Moreover, My point is that no matter how many times it has fallen, it has always bounced back and gone much higher (an important development)

So if your worry is buying at a high and then seeing the market drop, relax

You need to stay cool and not panic-sell when that happens and ride out volatility

Additionally, If you're planning a one-time buy, you might want to wait for a better entry point

Furthermore, If you plan to hold for decades, though, the more important part is just being in the market (which is quite significant)

Going back to not being able to time the market, for an instrument you have determined will be a positive addition to your portfolio and you plan to hold for a long time, now is as good a time as any to buy, given the current landscape

Additionally, If you consistently add funds to an ETF you already own, keep at it

Consistently and letting your money compound is part of the magical formula for success

On the other hand, Hold forever

Assessing whether or not now it a good time to sell is much of the same analysis; I would only add in that you should evaluate your needs on a regular basis, annually, and make sure your portfolio reflects them (remarkable data) (which is quite significant)

On the other hand, If you are moving into retirement and passive income is becoming a more important goal, you might want to sell certain stocks or ETFs at a high and reinvest your funds in dividend stocks

What the re reveals is re could also be a situation where someone needs their money very soon, for example, for a large purchase they've been saving for or because they're getting older and can't afford to lose money

Conversely, An experienced investor might sell at a high and keep the funds in high-yielding instruments T-bills and then reinvest at a low

That seems to be what Warren Buffett might be doing

However, Buffett himself cautions the average investor against many of the actions he takes, since this is his day job, giving him a different perspective

Buffett recommends that most people park most of their money in a fund that tracks the S&P 500

If you believe in the U

On the other hand, Economy and the market, it's a great option for most investors even today

Jennifer Saibil has no position in any of the stocks mentioned (noteworthy indeed)

The evidence shows Motley Fool has positions in and recommends Vanguard S&P 500 ETF

The Motley Fool has a disclosure policy.