Think the Stock Market Is Too Expensive? This Historical Chart Might Change Your Mind.
Investment
The Motley Fool

Think the Stock Market Is Too Expensive? This Historical Chart Might Change Your Mind.

July 27, 2025
06:07 AM
2 min read
AI Enhanced
moneystockstechhealthcaremarket cyclesseasonal analysismarket

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Solid returns have come even with bumps in the road.

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Quick insights and key information

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2 min read

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investment

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Published

July 27, 2025

06:07 AM

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The Motley Fool

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Key Topics
moneystockstechhealthcaremarket cyclesseasonal analysismarket

What the data shows is Is now the right time to buy stocks (something worth watching)

Meanwhile, It's a question that's been asked countless times, and whenever I field it, my answer is the same: "Yes. " That might seem crazy, but I assure you, it isn't

Meanwhile, Here's why: Over the long term, in a benchmark stock index the S&P 500 (^GSPC 0. 40%) has always ven to be a winning strategy -- even if someone's timing is horrible (something worth watching)

Still don't believe me

Nevertheless, Then take a look at this chart: ^SPX data by YCharts This's the S&P 500 dating back to 1957, when the index expanded to 500 companies and acquired its current name

Since then, it has increased by an astounding 14,000%

That works out to a compound annual growth rate (CAGR) of 7. 5% -- and that's before accounting for dividend payments

During that stretch, there have been many corrections, several bear, and 10 full-blown recessions

Additionally, And yet, no matter when someone bought, they would have made money -- if they had stayed invested in the market (which is quite significant), given the current landscape

Additionally, Image source: Getty Images

There's a lesson here: Timing the market is folly

Many fortunes have been made by people claiming to know when the right time to buy -- or sell

But far more money has been left on the table by investors trying to time the top or the bottom, in light of current trends

Furthermore, On the other hand, The best advice is the simplest: Avoid trying to predict price movements in the short term

Instead, what you can and invest for the long term

Ignore the headlines -- particularly when the market is going down

Nevertheless, However, And whenever you have doubts, glance at the chart above and remember: Stay patient, hold your stocks for the long term, and you'll come out a winner.