The fear of heights has an official name, acrophobia. The fear of market highs doesn’t have one yet, but if it did, a decent chunk of the investing public would likely qualify for a diagnosis right about now!
The S&P 500 has spent 2026 setting record after record, and it’s been hovering around the 7,500 range this summer.1 Every time it happens, the same question starts making the rounds. Stocks are at all-time highs, so should I keep buying? Shouldn’t I wait for the dip? Isn’t buying at the top the classic rookie mistake?
It’s a fair question. But before we answer it, let’s look at what a century of market data says about buying when prices feel expensive, and then let’s talk about the parts of this decision you can control, because there are more of those than you might think.
New Highs Are Normal
Since 1950, roughly 7% of all trading days have been all-time highs.2 That works out to a new record about every three weeks, on average, for seventy-five years. If all-time highs were a reliable sell signal, the market would have spent most of a century punishing anyone who stayed invested. It did the opposite!
Even better, about a third of those record highs went on to serve as market floors, meaning the index never fell more than 5% below them again.2 The deeper pullback that investors wait for simply never arrived. Anyone holding cash and waiting for a second bite of the apple simply watched the apple ride the escalator up.
The follow-up question is whether buying at a high leads to worse returns than buying on an ordinary day. J.P. Morgan ran that comparison, and the difference is close to a rounding error. Since 1970, buying the S&P 500 at an all-time high produced an average price return of 9.6% over the next twelve months, compared with 9.4% for every other day. Stretch it to twenty-four months, and the all-time-high buyer came out slightly ahead, 20.2% versus 18.9%.2
Buying at the Top Hasn't Been the Mistake It Feels Like
Average S&P 500 price return after investing, 1970 to 2025
Historically, buying at a record high has led to results almost identical to buying on any random day.
Source: J.P. Morgan analysis of S&P 500 price returns, 1970 to 2025. Past performance does not guarantee future results. For illustration only.
That’s the core problem with waiting for a pullback. There’s no proven strategy for timing the market, and the cost of guessing wrong compounds. We covered a piece of this before because missing a handful of the market’s best days can gut decades of returns, and those best days love to show up when everything feels terrible or, apparently, when everything feels expensive.
A Century of Receipts
If the recent data doesn’t convince you, let’s zoom way out. Since 1928, the S&P 500 has lived through the Great Depression, a world war, oil embargoes, double-digit inflation, Black Monday, the dot-com bust, the global financial crisis, and a pandemic that shut down the planet. That stretch includes more than two dozen bear markets, with an average peak-to-trough drop around 35%.3 Every single one of them ended the same way, with the market recovering and going on to set new highs.3
Now here’s what staying invested through all of that chaos looked like. A single $100 investment in the S&P 500 at the start of 1928, with dividends reinvested, grew to roughly $1.16 million by the end of 2025. The same $100 in 10-year Treasury bonds grew to about $7,750, and in Treasury bills to about $2,578.4
What $100 Became, 1928 to 2025
Dividends and interest reinvested for 98 years
That 98-year stretch includes the Great Depression, a world war, and more than two dozen bear markets. Stocks still compounded at roughly 10% a year, well ahead of long-run inflation near 3%.
Source: NYU Stern historical return data and Federal Reserve Bank of Minneapolis CPI data, 1928 to 2025. Bar lengths use a logarithmic scale so the smaller values remain visible. Past performance does not guarantee future results. For illustration only.
Over the same century, inflation ran near 3% per year, which meant Treasury bills barely kept your purchasing power alive. Stocks compounded at roughly 10% a year before inflation, leaving investors with real, spendable growth of about 7% annually.4 Cash feels safe at a market top, but over long stretches, it has offered little real growth after inflation.
A saver who contributed every month from 1928 onward would have bought into all-time-high markets many times over, and every one of those “expensive” entry points sits far below where the index trades today. The steady buyer never needed to guess correctly even once. The market timer needed to guess correctly twice, on the way out and again on the way back in, and there’s no evidence anyone can do that reliably.
The Dividend Engine
From 1940 through 2025, dividend income accounted for an average of 33% of the S&P 500’s total return, and since 1960, roughly 85% of the index’s cumulative total return has been attributable to reinvested dividends and the compounding they generate.5
Every quarter you hold, dividends buy more shares, those shares pay their own dividends, and the flywheel spins a little faster. Step out of the market, and the flywheel stops.
You Can’t Control Prices. Here’s What You Can Control.
So the evidence says keep buying while you’re in growth mode. But “keep buying” doesn’t mean “do nothing else.” You have no control over what the market charges for stocks on any given Tuesday. You have a surprising amount of control over almost everything surrounding that price.
The Investor's Control Panel
Spend your energy on the right column
Market prices are the one input you can't manage. Nearly everything else in a financial plan responds to deliberate decisions.
Start with rebalancing. A long rally almost certainly pushed your stock allocation above its target, so your portfolio is riskier today than the one you originally signed up for. Trimming winners back to target is routine maintenance rather than a market call, and it pairs naturally with the moments when life changes force a portfolio review anyway.
Concentration risk is a bit sneakier. Record highs in the index have been driven heavily by a handful of giant companies, and if your employer stock or a few lucky picks now dominate your net worth, the index’s resilience won’t protect you. Individual companies don’t get the “markets always recover” guarantee. Indexes recovered every time, but plenty of individual stocks never did.
Finally, there’s the tax layer. High markets mean big embedded gains, which makes tax-efficient decisions more valuable, from asset location to harvesting losses when they appear to choosing which account funds a withdrawal.
And finally, cash needs. Money you’ll spend within the next couple of years shouldn’t be riding at all-time highs in the first place. Keeping near-term spending in cash or short-term bonds means you’ll never be forced to sell stocks during the recovery phase of the next bear market, whenever it decides to show up.
Growth Mode Lasts Longer Than It Used To
One more reason to keep buying, and it’s the one people underestimate. Your time horizon is probably longer than you think. The average 65-year-old man today is expected to live to about 84, the average woman to about 87, and a married couple has a strong likelihood that at least one spouse lives into their 90s.6 Retire at 65 and your portfolio may need to fund three decades of groceries, travel, and healthcare, with inflation compounding against you the entire time.
That changes what “growth mode” means. It used to end at the retirement party. Now, a healthy 55-year-old buying stocks at an all-time high could still be holding those shares 35 years from now, and history suggests the entry price will look like a footnote by then. Even investors within five years of retirement usually need meaningful stock exposure, because the alternative is asking bonds and cash to outrun 30 years of rising prices, and the century of data above shows how that contest ends.
In Conclusion
Stocks at all-time highs feel expensive, but the record shows that new highs are a routine feature of a rising market. Buying at highs has historically produced returns nearly identical to buying on any other day, every bear market so far has given way to new records, dividends have done a third of the compounding work, and stocks remain the asset class that has consistently outpaced inflation over the last century. Since you can’t control prices, put your effort where it counts, meaning your savings rate, your rebalancing, your concentration, your taxes, and your cash reserve, all sized for a retirement that could easily run 30 years.
If the current highs have you wondering whether your own portfolio is still built correctly for your horizon, that’s exactly the review we help with. To talk through what this means for your plan, click the button below.
Sources
- Advisor Perspectives, S&P 500 Snapshot, July 2026
- J.P. Morgan, Is It Worth Considering Investing at All-Time Highs?
https://www.jpmorgan.com/content/dam/jpm/securities/documents/cwm-documents/Is-it-worth-considering-investing-at-all-time-highs.pdf - Hartford Funds, 10 Things You Should Know About Bear Markets
- NYU Stern, Historical Returns on Stocks, Bonds and Bills, 1928-2025; Federal Reserve Bank of Minneapolis, Consumer Price Index, 1913-
- Hartford Funds, The Power of Dividends: Past, Present, and Future
- Charles Schwab, Guide on Taking Social Security
