Since dropping by 19.4% in 2022, the S&P 500 (SNPINDEX: ^GSPC) has been on a tear. It rose 24.2% in 2023, 23.3% in 2024, and 16.4% in 2025, and so far through Aug. 20, it’s up 11.6% year to date.
While investors who’ve been along for the ride surely appreciate the market’s performance (based on the S&P 500) over the past few years, some are wondering whether now is a good time to sell, anticipating a pullback, correction, or bear market.
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If you’re an investor with time on your side, history has one clear answer to what you should do right now: Stay invested.
What is fueling the market’s current run?
Much of the market’s current run can be traced back to the artificial intelligence (AI) boom we’re currently witnessing. Investors have piled money into the major tech companies responsible for many of the AI developments.
On one hand, many of these companies have rewarded investors handsomely as their valuations surge. On the other hand, the S&P 500 is as concentrated as it has ever been. The “Magnificent Seven” stocks — Nvidia, Apple, Microsoft, Amazon, Alphabet, Meta Platforms, and Tesla — now account for a third of the index, which isn’t ideal for diversification but has worked in the index’s favor over the past few years.
Just this year, the S&P 500 has set 27 all-time highs.
Data source: Google Finance.
Except for the Aug. 13 high, had you sold any of your S&P 500 shares during one of these all-time highs, you would have missed out on eventual gains afterward. Admittedly, it’s easy to say this in retrospect, but it shows why it’s important to stay invested, even when the market reaches record highs.
The great times won’t last forever
It’s worth noting that it’s a matter of when the market has a downturn, not if. Since 1928 (right before the Great Depression), there have been 27 bear markets, averaging 3.5 years between them. They’ve been less frequent since 1945, with 15 since then and an average of 5.1 years between them.
