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Last week, the S&P 500 index ( ^GSPC 0.70% ) , composed of the 500 largest U.S.

companies by market cap, hit yet another all-time high, reaching $5,341.88 intraday on Thursday, May 23. An S&P 500 index fund has long been touted by Warren Buffett as his favorite investment for those who don't have the time to study individual stocks closely.



And last week's milestone certainly seems to justify that thesis. But with the stock market recently hitting a fresh all-time high, AI enthusiasm perhaps getting a bit bubbly, and interest rates and inflation remaining stubbornly higher than we'd like, is it really a good time to be buying the S&P 500 today? The case against buying the S&P 500 here For those cautious on the markets, you can find plenty of good reasons to hold off on buying the stock market averages. For one, the S&P, as a market-cap weighted index, is dominated by large technology companies which have gone up a tremendous amount recently, as part of a bull market that has lasted really since October of 2022.

The combination of interest rates appearing to top out, inflation having decreased from its peak of 9.1% in June of 2022 to just 3.4% last month, and tailwinds from the artificial intelligence boom have spurred large technology companies to fresh new heights.

And new highs aren't just being reached by Nvidia ( NVDA 2.57% ) , which just reached an eye-watering market cap of $2.6 trillion with a high P/E ratio of 62.

Most of the cloud giants, as well as associated semico.

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