Investing at All Time Highs
- Alex Potter, CFP®
- Feb 2
- 7 min read
Over the past 5 years, investors have lived through the COVID crash, high inflation and Fed rate hikes in 2022, Russia/Ukraine tensions, bank crisis (SVB collapse), and Tariffs. Even with all the challenges, we see US equity markets at near all time highs. What are some important things to consider during times like this?
One of the most important aspects to investing is “when in doubt zoom out”. For long term investors planning for retirement, it’s best to consider a longer time horizon than just the next news cycle.
S O U R C E : F A C T S E T , N B E R , R O B E R T S H I L L E R , J . P . M O R G A N A S S E T M A N A G E M E N T . D A T A S H O W N I N L O G S C A L E T O B E S T I L L U S T R A T E L O N G - T E R M I N D E X P A T T E R N S . P A S T P E R F O R M A N C E I S N O G U A R A N T E E O F F U T U R E R E S U L T S . G U I D E T O T H E M A R K E T S – U . S . D A T A A R E A S O F D E C E M B E R 3 1 , 2 0 2 5
Market sell-offs are part of investing. It is inevitable and common. In fact, 10% drops happen more often than people realize.
S O U R C E : F A C T S E T , C B O E , S T A N D A R D & P O O R ’ S , J . P . M O R G A N A S S E T M A N A G E M E N T . D R A W D O W N S A R E C A L C U L A T E D A S T H E P R I O R P E A K T O T H E L O W E S T P O I N T . G U I D E T O T H E M A R K E T S – U . S . D A T A A R E A S O F D E C E M B E R 3 1 , 2 0 2 5
One way to achieve long term results while minimizing risks to a degree, is by diversifying amongst market segments. The old saying of “don’t have all your eggs in one basket” is a true statement for a reason! We just never know what part of the market will outperform.
S O U R C E : F A C T S E T , R U S S E L L I N V E S T M E N T G R O U P , J . P . M O R G A N A S S E T M A N A G E M E N T . A L L D A T A A R E B A S E D O N R U S S E L L I N D E X E S A N D R E P R E S E N T T O T A L R E T U R N F O R S T A T E D P E R I O D . S M A L L C O M P A N Y S T O C K S M A Y B E S U B J E C T T O A H I G H E R D E G R E E O F M A R K E T R I S K T H A N T H E S E C U R I T I E S O F M O R E E S T A B L I S H E D C O M P A N I E S B E C A U S E T H E Y T E N D T O B E M O R E V O L A T I L E A N D L E S S L I Q U I D . E A C H S T Y L E I S R E P R E S E N T A T I V E O F C O R R E S P O N D I N G R U S S E L L S T Y L E I N D E X . P L E A S E S E E D I S C L O S U R E P A G E A T E N D F O R I N D E X D E F I N I T I O N S . P A S T P E R F O R M A N C E I S N O T I N D I C A T I V E O F F U T U R E R E T U R N S . L A R G E V A L U E = R U S S E L L 1 0 0 0 V A L U E I N D E X ; L A R G E G R O W T H = R U S S E L L 1 0 0 0 G R O W T H I N D E X ; M I D V A L U E = R U S S E L L M I D C A P V A L U E I N D E X ; M I D G R O W T H = R U S S E L L M I D C A P G R O W T H I N D E X ; S M A L L V A L U E = R U S S E L L 2 0 0 0 V A L U E I N D E X ; S M A L L G R O W T H = R U S S E L L 2 0 0 0 G R O W T H I N D E X . P A S T P E R F O R M A N C E I S N O G U A R A N T E E O F F U T U R E R E S U L T S . G U I D E T O T H E M A R K E T S – U . S . D A T A A R E A S O F D E C E M B E R 3 1 , 2 0 2 5
Did you know that when the stock market hits all time highs, statistically that level will become the “new floor” and never be broken? In 2025 alone, the S&P 500 had 39 “all time high” moments.
Source: FactSet, Standard & Poor’s, J.P. Morgan Asset Management.
(Left) Market floor is defined as an all-time high from which the market never fell more than 5%. (Right) *"Invest on
any day" represents average of forward returns for the entire time period whereas "Invest at a new high" represents
average of rolling forward returns calculated from each new S&P 500 high for the subsequent 3-month, 6-month, 1-
year, 2-year, 3-year and 5-year intervals, with data starting 1/1/1988 through 12/31/2025.
Guide to the Markets – U.S. Data are as of December 31, 2025
The other shocking statistic is that investing at “all time highs” has actually yielded better rates of return in the next 1 year, 2 year, 3 year and 5 year returns. Meaning, investing at ATH has in the past provided strong returns going forward.
Source: FactSet, Standard & Poor’s, J.P. Morgan Asset Management.
(Left) Market floor is defined as an all-time high from which the market never fell more than 5%. (Right) *"Invest on any
day" represents average of forward returns for the entire time period whereas "Invest at a new high" represents average
of rolling forward returns calculated from each new S&P 500 high for the subsequent 3-month, 6-month, 1-year, 2-year,
3-year and 5-year intervals, with data starting 1/1/1988 through 12/31/2025.
Guide to the Markets – U.S. Data are as of December 31, 2025.
Conclusion
Though no one can predict the future, we do know one thing... markets are volatile in the short term. News cycles will come and go, and concerns and fears - though real, have historically never broken the market forever.
For long term investors, the advice is simple, but never easy. Stick to a plan, remain invested and tune out the short term noise.
By this time next year, I’m confident we’ll have lived through new headlines, new worries, and moments that make it feel stressful to stay invested. However, Amazon trucks will still be delivering packages, gas stations will still be pumping gas, Costco will still be annoyingly packed, and college students will still be buying Apple laptops.
Remember, investing in the market means putting your dollars into companies - not politicians, not headlines, and not the next “hot stock”. It’s investing in real businesses, earning real revenue, with real profits.
Side Note:
As tax time approaches, please remember tax documents will be available on your custodian site (visit here to locate your custodian: https://www.fdnwealth.com/client-resources). If you have e-delivery on your account, please check your emails. If you need a copy of any tax document, you may also send me an email and I’d be happy to forward a copy.
Financial Fact
2025 IRA/ROTH contributions may be made until April 15th, 2026.
Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. This communication is strictly intended for individuals residing in the states of MI, IN, OH. Cambridge and Foundation Wealth Management are not affiliated.
