Key Points

The S&P 500 is on pace for its fourth consecutive year of double-digit gains.
Favorable earnings growth expectations and reasonable valuations could support stock prices in the near term.
Long-term investors should remain on course and focus on the hold in buy and hold.

The S&P 500 rose nearly 15 percent during the second quarter of 2026 marking its strongest showing since the 2020 rebound after COVID-19. Following a mixed first quarter the index gained about 10 percent over the first half of the year placing it on track for a fourth straight year of double-digit advances.

Historical patterns indicate such extended winning streaks occur infrequently. The most prominent example came between 1995 and 1999 when the S&P 500 recorded five consecutive years of double-digit returns. That run concluded with the bursting of the technology bubble leading to three straight years of double-digit losses.

Some observers naturally question how much longer such gains can continue. The artificial intelligence expansion continues to fuel revenue and earnings increases yet persistent inflation moderating economic growth potential Federal Reserve rate adjustments and geopolitical tensions represent ongoing concerns.

Earnings expansion expected to fuel near-term advances

FactSet projections currently anticipate 24 percent earnings growth for 2026 followed by an additional 17 percent in 2027. Although outcomes remain uncertain it appears unlikely that share prices would experience a major pullback amid such robust earnings expansion.

The situation might differ if valuations appeared stretched. The Shiller CAPE ratio which compares prices to 10-year inflation-adjusted earnings sits near record levels. However the forward price-to-earnings ratio for the Vanguard S&P 500 ETF stands around 23. This figure exceeds its long-term average yet remains below the peaks reached in 2024 and 2025.

Strong earnings growth paired with moderate valuations supports the argument that share prices may continue climbing.

Long-term investors advised to stay committed

Regardless of short-term conditions long-term investors benefit from maintaining their positions. The S&P 500 has delivered an average annual return of 10 percent across the past century. While individual years fluctuate historical evidence shows that extended holding periods improve the likelihood of positive outcomes.

Consider the past decade during which the Vanguard S&P 500 ETF achieved average annual returns exceeding 15 percent. This period included a 20 percent correction in late 2018 a decline surpassing 30 percent at the onset of the COVID pandemic and the 2022 bear market that reduced prices by approximately 24 percent.

Nevertheless investors who remained invested throughout realized above-average returns over the full period.

The essential element involves holding through challenging conditions. Many investors exit after prices have already fallen only to miss the recovery that follows. Such timing attempts often harm long-term results more than market movements themselves.

Even following a robust bull market that remains active the outlook stays positive for those prepared to maintain their approach.

Should investors consider S&P 500 Index shares at present

Prior to purchasing shares in the S&P 500 Index note the following. An analyst team recently selected what they view as the 10 strongest stocks for investors to acquire now and the S&P 500 Index did not appear on that list. The 10 selections could generate substantial returns over coming years.

The total average return stands at 918 percent representing significant outperformance relative to 208 percent for the S&P 500. Investors can review the latest top 10 selections through available services and join a community focused on individual investing.

Stock Advisor returns as of July 7 2026. The author holds no positions in the mentioned securities. Positions exist in and recommendations are made for the Vanguard S&P 500 ETF.