Waiting to Invest Is Costly, Even at All-Time Highs

The market hit another all-time high today. Every time this happens, I get asked the same questions;

“Should we wait for a pullback to buy?”

It sounds reasonable. It feels cautious.
Nope.

Waiting Feels Safe, But It Has a Hidden Cost

Holding cash feels like protection, but the real risk is missing time in the market.

J.P. Morgan’s research shows that missing just a small number of the market’s best days can dramatically reduce long-term returns.¹ The best days often happen around periods of uncertainty, not when things feel calm or obvious. When you wait for clarity, you often miss the days that matter most.

All-Time Highs Are Not a Warning Signal

An all-time high simply means prices are higher than they’ve been before.
It does not mean a drop is imminent. Vanguard studied every S&P 500 all-time high since 1950 and found that returns after record highs were similar, and sometimes better, than returns after any random day.² In other words, investing at a high has not historically been a disadvantage. Markets often keep rising after hitting new highs because those highs usually reflect strong fundamentals: growing earnings, innovation, and economic momentum.

Waiting for the “Dip” Often Backfires

Many investors wait for a pullback that either:

• never comes, or
• comes after prices are already much higher

Fidelity found that investors who delayed investing in hopes of better timing often ended up buying later at worse prices or missing entire periods of growth.³

Timing the market requires being right twice: when to get out, and when to get back in. Most people don’t succeed at that consistently.

Time in the Market Beats Timing the Market

Over long periods, being invested matters far more than when you invest.

Historically:

• Markets spend a lot of time near all-time highs
• Returns over 5 and 10 years have remained positive on average, even when starting at record levels²
• The biggest long-term mistakes come from sitting in cash too long, not from investing during strong markets

Volatility is normal. Waiting for “perfect” conditions is not a winning strategy.

The Bottom Line

An all-time high is not a reason to wait.
It’s not a signal to stop investing.
And it has never been a reliable predictor of poor long-term outcomes.

The market rewards patience, discipline, and participation, not certainty.

If you’re waiting for it to feel safe, history suggests you may be waiting longer and paying more than you realize.

​

​

​

Sources

1. J.P. Morgan Asset Management, The Cost of Missing the Best Days
   ​https://am.jpmorgan.com/us/en/asset-management/adv/insights/portfolio-insights/long-term-investing/
2. Vanguard Research, Investing at All-Time Highs
   ​https://investor.vanguard.com/investor-resources-education/article/investing-at-all-time-highs
3. Fidelity Investments, Should You Invest at Market Highs?
   ​https://www.fidelity.com/learning-center/trading-investing/investing-at-market-highs

​
​