The S&P 500 has retreated 3% from record highs, presenting a potential entry point for long-term investors amid elevated valuations.
The S&P 500 has declined roughly 3% from its early June peak of 7,620, settling near 7,385 as of June 5. The pullback follows a 16.4% surge since March 30, raising concerns about an overheated market and potential correction.
Historically, the index has delivered average annualized returns of 15% over the past decade and 11% over 20 years. Corrections, defined as drops of at least 10%, occur regularly and often provide discounted entry points for long-term investors.
Valuations are now at their highest levels since the 2021 tech boom, prompting caution among market participants. However, strategists suggest maintaining core positions in S&P 500 ETFs for consistent long-term growth.