How (and Why) To Stay in the Market Even at All-Time Highs
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But there are still compelling reasons to stay in the market, even at all-time highs. Here's why — and how you can do it.
The Market Consistently Makes New 'All-Time' Highs
Markets don't go up in a straight line, but history shows the S&P 500 has always gone on to make new highs, no matter how severe a bear market it endures. The fact that the index is at an all-time high as of July 2025 means that by definition, all of its past bad days and bad years are now in the rear-view mirror. Investors who have held on — or even added to their positions — during prior downturns have been handsomely rewarded with the highest price in the index's history.
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Market Technicians Love New Highs
Technical research interprets past trading patterns to predict future market movements. Many technicians view a new market high as a 'breakout,' indicating future upside to come. Numerous other factors can help support this prediction, such as rising trading volume and increasing market breadth, but in its most simplistic form, technical analysis usually views a fresh market high as an indication that prices will continue to go higher.
Timing the Market Leads To Underperformance
If you could always buy at the stock market's low and sell at its high, yes, you'd have a great trading record that would significantly outperform the overall market. But history, along with the shattered portfolios of numerous traders before you, shows that doing that consistently is all but impossible.
A more likely scenario is that you emotionally panic and sell your positions when the market is crashing and then start investing again after the market has made significant gains — right before the next bear market.
Another common scenario is that you fear the S&P 500 is 'overvalued' and you sell all your positions as the market goes higher and higher. Missing out on even a few of the best days in the market is enough to keep your portfolio in a perpetual state of underperformance, but it's a relatively common occurrence among those trying to time the market.
What Can You Do?
Investing at market highs is something of a double-edged sword. On the one hand, it's a great time to be invested in the S&P 500, because it means your portfolio should also be at all-time highs. However, it can also be a bit nerve-wracking because valuations are stretched to their limit, and the market is 'priced for perfection' — meaning everything has to continue doing well to support those lofty prices. As fear of losing money is generally greater for investors than the joy from profiting, it's natural to feel a bit queasy when market prices are high.
For most long-term investors, the best strategy is to stay the course. By investing consistently, regardless of the S&P 500's current condition, you end up with an average price that smooths out the market's ups and downs. If the market continues to go higher, you'll keep profiting from your investments, even the ones you made at a 'high' price. If the market falls, your ongoing investments will pick up shares at lower prices, leading to even greater profits in the future. Many advisors recommend that investors increase their contributions while markets are falling so they can benefit even more from 'on-sale' share prices.
While perhaps not a perfect system, consistent investing is a much better option than trying to time the market based on emotion and instinct. That has proven time and time again to be a losing game in the long run.
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This article originally appeared on GOBankingRates.com: How (and Why) To Stay in the Market Even at All-Time Highs
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