Look, I get it. Every time someone mentions the stock market hitting new highs, your first instinct is probably to think “this has to end badly, right?” But here’s the thing about the S&P 500 right now – it’s basically the financial equivalent of that friend who keeps winning at poker night. Annoying? Maybe. But you’d be crazy not to pay attention to their strategy.
The S&P 500 just wrapped up its third straight year of double-digit gains, sitting pretty at around 6,900 with a 19% return for 2025. That’s not just good – that’s “only happened 11 times in the past century” good. We’re talking about a streak that builds on 26% gains in 2023 and 25% in 2024. At this point, the index is basically showing off.
But here’s where it gets interesting (and why this isn’t just another “stocks go up” story). The market breadth – fancy talk for “how many different stocks are actually participating in this party” – has been expanding like crazy. Remember when everyone was worried that only the big tech giants were driving gains? Well, cyclical sectors like industrials and materials decided to crash the party this summer.
When over 75% of stocks in these sectors climb above their 200-day moving averages, historically speaking, good things happen. We’re talking about a setup that’s only occurred 15 times since 1953, and it’s been followed by average 12-month gains of roughly 29%. That’s not a typo – and it has a perfect track record.
Even the little guys are getting in on the action. Small-cap stocks (the Russell 2000) have been outperforming their large-cap cousins by 55% over the past month. That’s like watching the JV team suddenly start dunking on the varsity squad – it tells you something fundamental is shifting.
Now, I know what you’re thinking: “This sounds too good to be true.” And normally, I’d agree. But here’s the kicker – every single 10- and 20-year rolling period in the S&P 500’s history has delivered positive returns when you include dividends. We’re talking through world wars, the Great Depression, recessions, and yes, even global pandemics. The market has this annoying habit of rewarding patience.
The setup for 2026 looks pretty solid too. Fed rate cuts, steady corporate earnings growth, and productivity boosts from AI and tech advances are all playing nice together. Sure, valuations are above historical norms, but they’re built on actual growth, not just wishful thinking.
So what’s the play here? Keep it simple. If you want exposure to this potential fourth straight year of double-digit gains, just buy an S&P 500 ETF like VOO or go broader with VTI. No need to get fancy or try to time the market – that’s a game where the house usually wins.
The bottom line? Sometimes the obvious play is the right play. And right now, that play is staying invested and letting this bull market do what bull markets do best: make patient investors money.