Trade · Berlins Today
It's fair to say 2026 has thrown investors more curveballs — the war in Iran and soaring Treasury yields among them — than they bargained for. Amid those headwinds, the S&P 500 and other major U.S. equity gauges are marching higher. Investors can't directly invest in an index, so for this exercise, I'm using the Vanguard S&P 500 ETF (VOO), a nearly $1.1 trillion behemoth that's the world's largest exchange-traded fund (ETF). As of Sept. 4, the VOO ETF is up 13.6% year to date. That's commendable work in just over eight months, but the S&P 500's 2026 showing is even more noteworthy considering the aforementioned challenges.
When the S&P 500 hits a record, history suggests more often follow. The index has posted 461 record highs since 2013, indicating investors were rewarded for staying the course after each new high. From 2013 through June 2026, the S&P 500 delivered cumulative returns of 400%, with gains often well into double digits 12 months after hitting record highs. Fidelity research supports this trend, showing that historically, the average gain for the S&P 500 a year after tallying a record was 12.7%.
For investors holding the Vanguard S&P 500 ETF today who are feeling especially skittish, there are other reasons to stay the course. Had an investor tinkered, moving in and out of the market simply because all-time highs were reached, they would've inevitably missed some of the index's best days, dramatically altering their long-term returns. For example, a $10,000 investment in the S&P 500 on Jan. 1, 1988, would've been worth nearly $523,000 by Dec. 31, 2024, assuming no time out of the market.
The calendar also provides clues for what's in store in the months ahead. October is the last month in the weaker of the two six-month stretches for stocks. While Election Day could pose a challenge, markets appear at peace with the notion of a divided government when 2027 rolls around. Historically, the third year in the presidential cycle is usually the best for stocks. Additionally, the expected third-quarter S&P 500 earnings growth rate is 28.5%, which could pave the way for more highs if met or exceeded.
Source: The Motley Fool
