Investing at All-Time Highs

February 16, 2024

Some things are counterintuitive. Water intensifies grease fires. Sharp knives are safer than dull knives. Exercise in the morning gives you more energy throughout the day. Running away from a bear increases your risk of death. And…

Investing at all-time highs yields better returns than investing on any random day.

Wait, what?

The S&P 500 closed at an all-time high on January 19th of this year, prompting questions like “should we really invest now?” and “maybe we should wait for a pullback?” and “Invest now?! At all-time highs? Are you crazy?!” An understandable sentiment.

Anyway, here’s an interesting study:[i]

The data runs from 1988, which is the earliest we have data on the S&P 500 with dividends reinvested, through August of 2020. As you can see, the forward one, three, and five year returns after investing at an all-time high are superior – often drastically so – to the forward returns from investing on any given day.

Counterintuitive. Shouldn’t investing at all-time highs result in inferior long-term outcomes relative to investing on a random day? That old adage rattles around one’s brain… Buy low, sell high.

This result is surprising because we associate all-time highs with impending downturns. We remember the dramatic examples. The all-time high in March 2000 preceding the tech bubble bursting. The October ’07 high preceding the onset of the Great Financial Crisis. The all-time high on the first trading day of 2022 before the stock and bond markets plummeted for 10 months. Bear markets are burned into our brains. They were noteworthy events. They were splashed across the headlines. They are used as reference points (how many times have you heard someone refer to “2008,” even when not specifically discussing the stock market?). But there are all-time highs followed by more all-time highs and all-times followed by market crashes. Nearly all are the former! Which is how you get the ostensibly strange result that investing at all-time highs provides better forward returns that investing on any random day.

The March 2000 all-time high was a bad day to invest given the negative returns in 2001 and 2002.* The tech bubble wreaked havoc on the markets at the turn of the century. Then there was 9/11. We remember that. It was all over the news. But we forget 1989 - 1999, during which the market recorded 323 all-time highs[ii] while returning nearly 18% annually.[iii] 323! That’s an average of 29 all-time highs per year – one every 8.6 trading days – for eleven years.

323 understandable yet ultimately misguided reasons to avoid investing.

Then there’s 2008. The market reached an all-time high in October of 2007 before famously nosediving 57% over the subsequent 17 months.[iv] The worst economic downturn of anyone’s lifetime under 80 years old. Very memorable. Lots of news coverage: “The Great Financial Crisis.” Like a bucket of chum for financial journalists. That all-time high was not such a great day to invest.** Not because it was an all-time high, but because it was an all-time high preceding a massive economic and financial contraction. Those are not the same! All-time highs happen all the time. All-time highs preceding recessions are rare. The market finally reached a new high in 2013 and recorded 346 all-time highs through 2021[v] while returning over 16% annually.[vi] That’s good for 38 all-time highs per year – one every 6.6 trading days – for nine years.

346 understandable yet ultimately misguided reasons to avoid investing.

In retrospect, all-time highs simply look like great investing opportunities.

Sean Cawley, CFP®

*Your time horizon matters here. The S&P 500 has returned roughly 7% annualized since the March 2000 all-time high.[vii]

**Again, time horizon. The S&P 500 has returned roughly 7.5% annualized since the October ’07 all-time high.[viii]


Neither asset allocation nor diversification guarantee against investment loss. All investments and investment strategies involve risk, including loss of principal.

Content here is for illustrative and educational purposes only. It is not legal, tax, or individualized financial advice; nor is it a recommendation to buy, sell, or hold any specific security, or engage in any specific trading strategy. Results will vary. Past performance is no indication of future results or success. Market conditions change continuously.

This commentary reflects the personal opinions, viewpoints, and analyses of Resolute Wealth Management. It does not necessarily represent those of RFG Advisory, clients, or employees. This commentary should be regarded as a description of advisory services provided by Resolute Wealth Management or RFG Advisory, or performance returns of any client. The views reflected in the commentary are subject to change at any time without notice.



[iii] YCharts, Fundamental Charts, ^SPX Total Return Level, 01/01/1989 – 12/31/1999.

[iv] YCharts, Fundamental Charts, ^SPX Level, 10/09/2007 – 03/09/2009.


[vi] YCharts, Fundamental Charts, ^SPX Total Return Level, 01/01/2013 – 12/31/2021.

[vii] YCharts, Fundamental Charts, ^SPX Total Return Level, 03/23/2000 – 02/14/2024.

[viii] YCharts, Fundamental Charts, ^SPX Total Return Level, 10/09/2007 – 02/14/2024.