Dear Clients & Friends,

Lately, markets have been hovering near all-time highs, and it’s easy to wonder: Can this continue?  Are we due for another leg higher—or is a pullback around the corner?

The truth is no one knows what the next 10% move will be.  It could be up, or it could be down. Markets are unpredictable in the short run, and anyone who tells you otherwise is guessing (emphasis added).  But what I can say with complete confidence is that the next 100% move will be to the upside.  That’s not a prediction—it’s a historical reality.

The Short Term Is a Coin Toss.  The Long Term Isn’t.

Over the past century, the U.S. stock market has weathered wars, recessions, oil shocks, political crises, pandemics, and everything in between. Yet through it all, the S&P 500 has advanced from roughly 10 in 1926 to over 6,700 today—a remarkable 67,000% increase built on the enduring forces of resilience, innovation, and progress.(Bloomberg, LP)

Of course, this climb has never been smooth.  On average, the S&P 500 experiences a 10% correction about once a year, a 20% bear market every three to four years, and a 30% decline roughly once every five or six years. (Bloomberg, LP) These setbacks, while uncomfortable, are simply the toll we pay for the privilege of long-term progress.

And yet, despite all that volatility, the market’s long-term direction has always been the same. Over every rolling 15-year period in U.S. history, the S&P 500 has always moved higher, which shows the perseverance and the enduring strength of the American economy.

All-Time Highs Are Not a Ceiling

It’s natural to feel uneasy when the market sits at or near record levels.  After all, “all-time high” sounds like uncharted territory. But historically, all-time highs have tended to be followed by more all-time highs.  Consider this:

  • From 2013 through 2021, the S&P 500 hit dozens of new records—and yet, the index roughly tripled in value during that period. (Bloomberg, LP)
  • After breaking through 1,500 in 2000, the market went on to more than quadruple over the next two decades, even after enduring two major bear markets. (Bloomberg, LP)
  • In the 1950s, the Dow reaching 1,000 felt like the top. (Bloomberg, LP) Today, it’s over 40 times higher.

The point is, new highs don’t signal an end—they’re a normal and healthy part of long-term compounding.

The Power of Staying Invested

Trying to outguess the market’s short-term moves is not a strategy—it’s a gamble.  The data is overwhelmingly clear: investors who attempt to time the market often miss its best days, which can drastically reduce long-term returns.

For example, missing just 10 of the best days in the S&P 500 over the last 20 years would have cut your total return by more than half (Bloomberg, LP). Those best days almost always occur during periods of high volatility—right when fear is at its peak.

In other words, to capture the next 100% move up, you must stay invested through the uncomfortable volatility that precedes it—that’s simply how progress in the market works.

Perspective and Patience Pay Off

At Mercer Partners, we believe successful investing is less about predicting what happens next and more about preparing for whatever happens next.

Our role is to help you stay focused on your goals, maintain discipline through uncertainty, and allow time—not timing—to do the heavy lifting.

So, as headlines speculate about whether markets will “break out” or “pull back,” remember this simple truth:

The next 10% move could go either way, but the next 100% move will go up— because markets rise on the relentless power of human progress and ingenuity. (Bloomberg, LP)

A Note of Gratitude

As we approach the end of the year, I want to take a moment to thank you—our clients, colleagues, and friends—for your continued trust and confidence.  It’s a privilege to serve as your partner on this financial journey, and we never take that responsibility lightly.

Your loyalty and belief in the disciplined, long-term approach we share are what make our work so deeply meaningful.  From all of us at Mercer Partners, thank you for allowing us to be part of your story.

Regards,

Nick

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

The S&P 500 is a stock market index tracking the stock performance of 500 of the largest companies listed on stock exchanges in the United States. Indexes are unmanaged and cannot be invested in directly.

The Dow Jones Industrial Average is comprised of 30 stocks that are major factors in their industries and widely held by individuals and institutional investors.

No investment strategy assures success or protects against loss.