Investing with markets at their highest should not worry you.

At inbestMe, one of the most frequent questions we receive in times like these is:

“I’ve sold a business (or an apartment), and I want to invest that capital, but I’m worried that markets are at all-time highs. Wouldn’t it be better to wait for a correction?”

This concern is logical: we associate an all-time high with the risk of an imminent drop. And no one wants to invest just before a correction.

All-time highs are normal

The first thing to understand is that all-time highs are normal and common.
In indices like the S&P 500 or MSCI World, new highs are reached several times a year during bull markets. Rather than a danger signal, highs are not a sign of a bubble or imminent crash — they are simply another indication that, in general, markets (even though they fall quickly) rise more and for longer. 

As shown in the top chart (in red), both indices are at all-time highs around 7% of the time.

That same chart also shows how many highs can occur within a single year — an average of 20 since 1995 in these indices.
The 2000s were an exception, with up to 8 years without a single new high.

So far in 2025 (despite tensions caused by the trade war), we’ve already seen 7 new highs in the S&P 500 and 17 in the MSCI World, following dozens of highs in 2024 (57 and 48 respectively).

Don’t be afraid of investing at highs — it’s not necessarily bad

Investing at all-time highs is not only not a bad thing — it has historically delivered returns equal to or even better than investing at other times.

In the S&P 500 (see the chart above), investing at a market high has produced average returns that are equal to or better than investing at other times — over 1, 3, and 5-year periods.

In the MSCI World (see the next chart), returns have also been strong: better at 1 year, similar at 3 years, and slightly lower at 5 years.

So, in general, highs are not a barrier, and the differences are moderate.

So, in general, highs are not a barrier, and the differences are moderate.
In terms of annualized returns (CAGR), the S&P 500 (since 1950) has returned around 9%, whether investing at highs or at other times, regardless of the time horizon.
In the case of the MSCI World (since 1970), the results are a bit less consistent: annualized returns are around 8% in most scenarios — except when investing at highs over 1 year, where it rises to 9.8%, and over 5 years, where it drops to 6.6%.

But it’s not all about statistics — consider your psychology

Even though the data encourages us to invest without fear, psychology undoubtedly plays a major role in financial decisions. Professor Daniel Kahneman taught us that the pain of losses outweighs the joy of gains. That’s why many investors prefer to enter gradually (through dollar cost averaging), even if that means giving up part of the potential return.

At inbestMe, we understand that everyone has a unique financial mindset and risk profile, and we know how important it is to adapt to that.
Minimizing regret is key when making decisions like this.

Some may regret missing out on gains if they invest gradually and the market continues to rise. But most would regret even more, investing all at once just before a drop.

We shouldn’t always let behavioral psychology drive our decisions, but it can be helpful to strike a healthy balance between data and our (imperfect) financial psychology when facing important choices.

What’s the best strategy?

There’s no one-size-fits-all answer, but here are a few guidelines:

• If your risk tolerance is high, and you’re investing for the long term, investing all at once may make more sense — and is statistically more efficient.
• If you’re uncomfortable with initial volatility and afraid of regretting a sudden drop, you could invest in stages — for example, investing 50% up front and the rest over 6 to 12 months. It’s better to schedule this in advance to avoid hesitation, even though this approach is statistically less efficient.

Investing at highs shouldn’t hold you back

Investing at all-time highs shouldn’t paralyze you. The key is not to try to guess the perfect market timing, but to stay well-diversified, have a plan tailored to your goals and risk profile, and follow a consistent strategy.

And remember: you don’t have to invest everything in stocks. With inbestMe, you can build a well-balanced portfolio that includes equities, bonds, and cash — designed to support you through all market cycles. It’s important to find an asset allocation and strategy that helps you stay fully invested from the beginning.