“Did I Miss It?” Why All-Time Highs Are a Terrible Excuse to Sit in Cash
A few reasons why you should just stay invested..
When markets are trending higher, it’s common to hear questions like: “Did I miss it?” or “Does it make sense to invest now even though we are at all time highs?”
Rational thoughts. After all, it feels counterintuitive to invest when stocks are hitting new highs. Many investors feel tempted to wait for a pullback—“Let’s wait for the market to cool off a bit, and then we’ll get in.”
But here’s the problem: that mindset, while emotionally comforting, can be incredibly damaging to your long-term returns.
We’ve trended higher since Tuesday and now we’ve seen twelve all-time highs in 2025:
The media will join in:
“Are valuations too high?”
“How much higher can this go?”
“A correction is overdue!”
“Market is about to face a huge test”
Here’s a recent Wall Street Journal article…
This constant back-and-forth should shine a light on how ridiculous this stuff can get. The media needs something to talk about. Reminds me of the Morgan Housel quote, “A lot of financial debates are just people with different time horizons talking over each other.”
For a long-term investor, these debates are mostly noise and you can gladly tune them out and focus on your objectives.
As the chart above highlights, all-time highs aren’t rare, they’re normal and happen quite often.
Don’t be scared, embrace it.
JP Morgan analyzed the S&P 500 since January 1, 1988 through December 31, 2024 and their research shows that investing on all-time highs produces similar—or even better—returns compared to investing on an average day:
Like many areas of life, don’t bet against strong momentum. Especially in the market, momentum typically reflects growing earnings, economic strength, and investor confidence.
And it’s not a total mystery why markets continue to trend higher:
I get it — people hate losing money more than they love making it.
It makes sense that if you put a lump sum of money into the market, only to watch it drop right away, you feel defeated and are pissed.
A lot of people will hesitate to invest because they’re worried things are too good, and a decline must be right around the corner. So they sit on the sidelines, waiting for a perfect entry point that may never come.
But as we know, inaction is the ultimate wealth killer.
If jumping in head first feels too risky, start in the shallow end. You don’t have to go 100% stocks. Diversify — buy some stocks, bonds, and money markets to make the ride smoother.
Anything is typically better than sitting in straight cash…
Another strategy many people are comfortable with is dollar-cost averaging—consistently investing smaller amounts over time.
While Nick Maggiulli has done the math that shows lump sum investing mathematically tends to yield higher returns, we aren’t spreadsheets, and dollar cost averaging can help reduce regret and makes it emotionally easier to stay invested during volatile periods:
Just keep reminding yourself: the most effective way to capture the incredible long-term returns of the market is to stay fully invested—not just when it feels good.
Investing is all about expectations.
You need to understand that one of these highs will be a peak, and that’s okay…
There will be a time when we don’t see new highs for a few years. Look at 2008-2012 up above, which is not that long ago.
But you won’t know it in advance.
Trying to call the top may sound smart, but it’s a waste of time—and money. Instead, strike a balance between liquid cash, long-term retirement accounts and a balanced investment account right in the middle.
If this is money you’re investing for years—or even decades—why would today’s headlines or market level matter?
For context - the S&P 500 index started the year 2010 around 1,130. Through Wednesday, we closed at 6,358. A 462% return over 15 years…
Stay focused. Stay consistent.
Disclosure: This material is for general information only and is not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results.
All indices are unmanaged and may not be invested into directly.
All investing includes risks, including fluctuating prices and loss of principal.