Investing in Market Dip Using Leveraged Purchases
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The S&P 500 (SP500) has reached new all-time highs, following projections made around mid-to-late summer. As of early August 2025, the index stands near an all-time high level of about 6,238 points, boasting a strong year-to-date return of approximately 14.5% for the past 12 months.
However, market seasonality data suggests that some short-term softness might be expected during the "dog days" of summer. Historically, August has been a weak month for US stocks, with an average price-only return of about -0.6% over the past 35 years [1].
Despite this potential short-term weakness, the 2025 year started poorly for the S&P 500 but recovered to a solid normalized performance, not unusual after gains seen in 2024. Earnings growth forecasts remain optimistic, with anticipated year-over-year growth near 9.9%, which supports the elevated valuation levels despite the historical seasonality headwinds [3].
The S&P 500's all-time highs were projected in a previous article, and the index has since reached these levels. The strong overall performance of the index, despite the potential August weakness, underscores the resilience of the US stock market.
In summary, after reaching all-time highs in mid-to-late summer 2025, the S&P 500 is performing well overall YTD but may experience some typical August weakness as forecasted by historical seasonal patterns and market analysis [1][4]. Investors are advised to keep a close eye on market trends during this period.
[1] Data from the past 35 years indicates that August tends to produce an average price-only return of about -0.6% for the S&P 500. [2] The 2025 year started poorly for the S&P 500 but recovered to a solid normalized performance, not unusual after gains seen in 2024. [3] Earnings growth forecasts remain optimistic with anticipated year-over-year growth near 9.9%. [4] As of early August 2025, the index was near an all-time high level of about 6,238 points with a strong year-to-date return of roughly 14.5% for the past 12 months.
Investors might want to closely watch the stock-market trends during the dog days of summer, considering the historical trend of the S&P 500 experiencing a minor decrease in August. Despite this seasonal predilection, the S&P 500's robust overall performance and optimistic earnings growth forecasts in finance indicate its resiliency and potential for continued growth.
