A new analysis from Citi Wealth’s Investment Lab challenges one of investing’s most ingrained habits: waiting for a pullback before putting money to work. Drawing from six-and-a-half decades of data dating back to 1960, the findings paint a picture most casual investors would find counterintuitive, and the implications could reshape how you think about deploying cash.
Here is what Citi’s research actually found, why the numbers support a different approach, and what leading Wall Street strategists are telling their clients to do about it.
Citi’s 65-year study shows peak-day buyers performed just as well
The core finding from Citi Wealth’s Investment Lab report is deceptively simple: investors who bought the S&P 500 on days when it closed at a record high earned returns virtually identical to those who invested on any other day over 1-, 3-, and 5-year periods, going back to January 1960.
That finding alone undercuts the common assumption that buying near the top locks in subpar performance for years to come. Since 1960, the index has reached a new record close 1,195 times, meaning peak days account for roughly one out of every 14 trading sessions across the period, the research noted.
The 1990s alone produced 311 new highs, while the 2010s generated 242, demonstrating that record peaks are a recurring feature of healthy markets rather than a warning signal.
The research also found that market highs cluster together in long stretches, often spanning entire decades before a major disruption resets the cycle. Only the 2000s, marked by the dot-com implosion and the financial crisis, produced a comparatively thin total of just 13 new highs across the full decade.
The hidden cost of waiting for an S&P 500 pullback
Perhaps the most striking element of Citi’s analysis is what happens to investors who sit on the sidelines and wait for a meaningful pullback before committing capital to equities. The data suggest that, in this specific context, patience has historically been punished rather than rewarded.
Using S&P 500 data from 1960 through July 2025, Citi examined forward returns for investors who held off after a record high, waiting for a 5%, 10%, or 20% decline before getting invested, the report indicated. The results paint a costly picture for those who choose to wait on the sidelines.
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After a record high, it took an average of 143 trading days for even a modest 5% pullback to arrive, and investors waiting for that dip were invested for only 62.5% of the total period, the Citi data showed. For those holding out for a 10% drop, the average wait stretched to 225 trading days, leaving them invested just 44.9% of the time.
Investors waiting for a full 20% correction sat in cash for an average of 290 trading days and were invested only 25.4% of the time, the report noted.
The most significant takeaway from the report is that, in many instances, the pullback an investor was waiting for never materialized during the measurement period.
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Wall Street strategists reinforce Citi’s record-high findings
Citi is not alone in reaching these conclusions, and J.P. Morgan’s own research using data from 1988 through 2024 found that the S&P 500 has frequently delivered stronger cumulative returns after reaching a new peak than it produced on any random trading day, J.P. Morgan noted in its analysis.
J.P. Morgan strategists also observed that since 1950, the S&P 500 has reached an all-time high on roughly 7% of trading days, and almost a third of those highs became new market ‘floors’, levels from which the index never fell more than 5% again.
That data point alone suggests that an all-time high is more often a launching pad than a cliff edge for equity prices going forward.
“Being really specific around where you allocate risk to within the equity markets is going to be key for the rest of the year,” said Kristy Akullian, BlackRock’s head of iShares investment strategy.
Kristy Akullian, head of iShares investment strategy for the Americas at BlackRock, echoed that optimism, saying the firm remains bullish on U.S. equities. She also characterizes her team’s outlook as one that pairs continued confidence in the growth of artificial intelligence with sensible portfolio diversification across multiple asset classes.
Why S&P 500 all-time highs keep clustering together
Citi’s report explained that record highs tend to signal robust economic fundamentals rather than irrational exuberance, and the same conditions that pushed prices to a new peak frequently support continued upward momentum for months or even years afterward.
The S&P 500’s history since 1960 shows that new highs have arrived in long, dense clusters separated by relatively brief dry spells. The 1960s produced 229 new highs, followed by a lean 1970s that saw only 35, reflecting the stagflation and oil shock-era headwinds on corporate earnings and investor confidence.
The 1980s rebounded to 190 peaks as inflation cooled and the economy expanded, and the 1990s tech boom powered the highest single-decade total of 311 record closings.
The 2020s had already recorded 176 record closes through July 31, 2025, according to data from the Citi Wealth Investment Lab. Ryan Detrick of Carson Group has noted that the S&P 500 recovered from the 2022 bear market and notched a fresh record in January 2024.
What Citi’s data means for your portfolio decisions
The practical upshot of Citi’s research is that the fear of buying at a peak has historically been more costly than the risk of a near-term correction for investors willing to maintain a 1-, 3- or 5-year holding period.
Detrick told Benzinga that investors with a longer time horizon can afford to look past short-term volatility. He noted that every year brings scary headlines and painful drawdowns, but that remaining invested through those episodes has consistently produced better outcomes than retreating to cash.
Citi’s own report cautioned that market volatility can still lead to meaningful short-term losses if a correction occurs shortly after an investment. The data does not rule out a painful drawdown in 2026, and Detrick himself has warned that midterm election years have historically produced the largest peak-to-trough pullbacks.
With midterm-year intra-year declines averaging 17.5% since 1950, compared to 11.2% to 12.9% in years one, three, and four of the presidential cycle, according to Carson Group, Citi’s study distinguishes between short-term discomfort and long-term regret.
Related: Citi just added an AI agent to your wealth management team
