Investing at All-Time Highs

“I have some extra cash, what should I do with it?” Or, “I don’t want to invest right now, the market is too high and a correction is coming.”

As advisors, we’ve heard questions and statements like this a lot lately. With historically low-interest rates, most people recognize that it may not make sense to leave excess funds in the bank.  But, with markets at all-time highs, many are uncomfortable with the idea of investing extra cash.

Perhaps you have heard the term “FOMO.” It stands for “fear of missing out.” We have all experienced it. It’s human nature. As advisors, we see FOMO often.

Clients call and tell us that they got a hot tip from their neighbor on a stock they made 100x on, and they want in. Or, they need to buy a property because they heard it’s such a great deal. They know they can turn it for quick cash.

Another acronym we could coin is “FOR” or “fear of regret.” Remember how nervous you were to make your first big purchase? The uncertainty of possibly overpaying for a new car, buying a home in the wrong neighborhood, or just making the wrong decision, in general, can be nerve-wracking.

So why is it that something as exciting as all-time highs in the markets can elicit such a nervous response? It’s FOR at play. Many investors feel like they’ve missed the opportunity to get in on the action.

Others feel like with the markets this high. There’s no way they could go higher. Some would rather wait for another pullback and then invest. If this is you, take a look at our article “Speculation is Not a Plan.” Investors are afraid of making the wrong decision and regretting the outcome.

We want to challenge you to think of all-time highs in a different light. Most acknowledge that market corrections are an inevitable component of investing. That certainly is true, but new all-time highs also happen more than you might think. Would you be surprised to hear that the S&P 500 has seen more than 270 new all-time highs since 2013?


In August 2020, J.P. Morgan released an article discussing investing during all-time highs.  Within the article, J.P. Morgan compared two hypothetical investors. The first invested in the S&P 500 on any random day from January 1, 1988, to August 27, 2020. The second only invested on days when the S&P 500 closed at an all-time high. Remarkably, the investor who invested only during all-time highs did better.

Is there the chance that the markets could enter a market correction just days after you invested during all-time highs? Absolutely, which is why we believe in the importance of having a financial plan that considers your short and long-term cash needs as you determine if, how, and when to invest. However, assuming your investment decisions are made in the context of your overall financial plan, the investing odds are in your favor if you continue to take the long view, regardless of how the market is performing on the day you invest.

Means Wealth Management is a registered investment adviser. This material’s information is for educational purposes only and is not intended to act as individualized tax, legal, financial, or investment advice. Data contained herein from third-party providers is obtained from what are considered reliable sources.
However, its accuracy, completeness, or reliability cannot be guaranteed. Past performance is no guarantee of future results. Please consult a qualified attorney or tax professional for individualized legal or tax advice. Please contact a financial advisor for specific information regarding your individualized financial and investment planning needs.