When stock markets reach new all-time highs, investors often find themselves facing a difficult decision. On one hand, the strong performance of equity markets creates optimism and reinforces confidence in long-term investing. On the other hand, the higher stock prices climb, the more investors begin to worry that a correction might be just around the corner, particularly when geopolitical tensions, economic uncertainty, and concerns about valuations dominate the headlines.<\/p>\n\n\n\n
During my recent presentation at the EFPA Meeting 2026<\/a>, one of Italy’s leading events dedicated to financial advisors, I addressed a question that I frequently hear from investors and professionals alike: if the stock market is already trading at record highs, should we stop investing and wait for a better opportunity?<\/strong><\/p>\n\n\n\n At first glance, the answer might seem obvious. We have all been taught that successful investing means buying low and selling high, so purchasing stocks when they are already trading at historically elevated levels can feel counterintuitive. Similarly, selling investments after a prolonged rally and waiting for prices to decline might appear to be a sensible way to protect accumulated gains.<\/p>\n\n\n\n However, financial markets have a remarkable ability to challenge our intuition, and when we examine historical S&P 500 returns, we discover that some of the most widely accepted assumptions about market timing are not necessarily supported by the evidence. In fact, the data suggest that waiting for the perfect moment to invest can come at a substantial cost, while remaining invested through periods of uncertainty has historically rewarded patient investors.<\/p>\n\n\n\n One of the most compelling arguments against trying to predict stock market corrections comes from research published by J.P. Morgan, which analyzed how missing just a handful of the strongest trading days could dramatically affect long-term investment returns.<\/p>\n\n\n\n Imagine an investor who invested $10,000 in the S&P 500 at the beginning of 2003 and maintained that investment until the end of 2022, without attempting to predict market movements or temporarily exit the market during periods of uncertainty. Despite experiencing the global financial crisis of 2008, the COVID-19 pandemic, and several other episodes of extreme volatility, that initial investment would have grown to approximately $64,844<\/strong>.<\/p>\n\n\n\n Now imagine that the same investor attempted to time the market and, in doing so, missed just the 10 best trading days during those 20 years. Instead of accumulating $64,844, the investment would have ended with approximately $29,708, meaning that missing only 10 sessions would have reduced the final portfolio value by more than half.<\/p>\n\n\n\n The results become even more striking when we extend the analysis. Missing the 20 strongest trading days would have reduced the final investment value to $17,826, while missing the 30 best days would have left the investor with just $11,701. An investor who missed the 60 strongest sessions would have ended the period with only $4,205, despite the fact that the S&P 500 generated substantial positive returns over those two decades.<\/p>\n\n\n\n Caption: The impact of missing the S&P 500’s best trading days between 2003 and 2022. A $10,000 investment would have grown to $64,844 if continuously invested, compared with just $29,708 if the investor had missed the 10 strongest sessions. Source: J.P. Morgan.<\/p>\n\n\n\n The significance of these figures goes beyond the difference in final portfolio values, because they reveal how a relatively small number of trading sessions can contribute disproportionately to long-term returns. Investors who decide to sell their holdings because they believe the market has risen too much are effectively assuming that they will be able to identify not only the appropriate moment to exit, but also the right time to re-enter, and history suggests that consistently making both decisions correctly is extraordinarily difficult.<\/p>\n\n\n\n Of course, this historical simulation is based on identifying the strongest trading days with hindsight, and it does not account for the possibility that an investor who temporarily exits the market might also avoid some of the worst sessions. Nevertheless, it demonstrates the potential opportunity cost associated with remaining out of the market, particularly when significant gains occur over very short periods.<\/p>\n\n\n\n There is another fascinating aspect of the J.P. Morgan research that makes the challenge of market timing even more apparent: seven of the 10 strongest trading days between 2003 and 2022 occurred during bear markets<\/strong>, precisely when investors were most likely to be pessimistic about the future.<\/p>\n\n\n\n Looking at the historical data, we discover that some of the largest daily gains in the S&P 500 occurred during the financial crisis of 2008 and the extraordinary volatility associated with the COVID-19 pandemic in 2020. On October 13, 2008, for example, the index gained approximately 11.6% in a single trading session, while on March 24, 2020, it advanced by approximately 9.4%, despite the uncertainty surrounding the global economy.<\/p>\n\n\n\n Perhaps even more revealing is the fact that, in March 2020, one of the strongest trading days occurred immediately after one of the weakest sessions, illustrating how rapidly market sentiment can change when volatility reaches extreme levels.<\/p>\n\n\n\n This is particularly important because investors rarely feel comfortable increasing their equity exposure during a major market decline. When financial headlines are dominated by recession fears, declining corporate earnings, or geopolitical instability, the natural response is often to reduce risk and wait until the situation becomes clearer. Unfortunately, by the time confidence returns and economic prospects begin to improve, stock prices may already have recovered significantly.<\/p>\n\n\n\n The difficulty is therefore not simply identifying whether markets are expensive or whether a correction might occur, but determining exactly when the market will decline, how far it will fall, and when the recovery will begin. Even professional investors with sophisticated analytical tools struggle to consistently predict these turning points, which is why attempting to avoid short-term volatility can ultimately become one of the greatest threats to long-term investment performance.<\/p>\n\n\n\n This brings us to a principle that I consider particularly important when discussing investment decisions with financial advisors: time in the market is generally more important than timing the market<\/strong>. Rather than constantly trying to anticipate the next correction, investors with sufficiently long investment horizons may benefit from focusing on portfolio discipline, diversification, and the ability to remain invested even when financial markets become uncomfortable.<\/p>\n\n\n\n Avoiding the temptation to sell during periods of uncertainty is only part of the challenge, because investors frequently face the opposite dilemma when they have additional capital available to invest. Imagine an entrepreneur who has just sold a business, an individual who has received an inheritance, or a saver who has accumulated a significant amount of cash and is considering investing it in the stock market.<\/p>\n\n\n\n If the S&P 500 is trading near an all-time high, the immediate reaction is often to postpone the investment, based on the belief that waiting for a correction will provide a more attractive entry point. Although this reasoning might seem perfectly logical, historical data from BlackRock suggest that investing at record highs has not necessarily produced inferior results compared with investing at other points in time.<\/p>\n\n\n\n Research covering the period from January 1927 to June 2025 compared the average annualized total returns of the S&P 500 following investments made at all-time highs with those following investments made on other trading days. Over a one-year investment horizon, purchasing the index at an all-time high generated an average annualized return of 7.6%, compared with 8.8% for investments made at other times, suggesting a modest advantage for investors who entered the market away from record levels.<\/p>\n\n\n\n However, the relationship changed when the investment horizon was extended. Over three years, investments made at all-time highs generated average annualized returns of 8.8%, compared with 8.1% for investments made on other days, while over five years the respective figures were 8.4% and 8.2%.<\/p>\n\n\n\n Caption: Historical S&P 500 average annualized total returns following investments made at all-time highs compared with other trading days, alongside the number of new record highs reached in individual years. Historical returns cover January 1927 to June 2025. Source: BlackRock; A Wealth of Common Sense<\/p>\n\n\n\n These results challenge the widespread assumption that purchasing stocks at record prices is necessarily a poor investment decision. Although buying at an all-time high may feel psychologically uncomfortable, the historical evidence suggests that the starting price alone is not sufficient to determine whether an investment will be successful, particularly when the investor has a multi-year time horizon.<\/p>\n\n\n\n The figures should not be interpreted as a guarantee that investing at record highs will always outperform other entry points, nor do they imply that valuation levels are irrelevant. What they demonstrate is that the mere fact that the S&P 500 has reached an all-time high has historically not been a reliable reason to postpone a long-term investment<\/strong>.<\/p>\n\n\n\n To understand why investing at an all-time high has historically produced competitive returns, it is useful to examine another characteristic of equity markets that is often overlooked: new record highs tend to occur in clusters rather than as isolated events.<\/p>\n\n\n\n The second chart in the BlackRock slide illustrates the number of all-time highs recorded by the S&P 500 in individual years between 1990 and 2024, revealing that periods of sustained market strength have frequently been accompanied by dozens of new records. During the bull market of the 1990s, for example, the index repeatedly reached new highs, while a similar pattern emerged during the recovery that began in 2013 and in subsequent periods of strong equity market performance.<\/p>\n\n\n\n This phenomenon becomes easier to understand when we remember that stock prices reflect investors’ expectations about future corporate earnings, economic growth, and business opportunities. When these expectations improve and companies continue generating profits, there is no fundamental reason why an index should stop rising simply because it has surpassed its previous highest level.<\/p>\n\n\n\n A stock market index reaching an all-time high does not necessarily mean that it has become overvalued, just as a market trading below its previous peak is not automatically undervalued. Valuations depend on a much broader set of variables, including earnings growth, interest rates, profit margins, and the returns investors expect to receive in the future.<\/p>\n\n\n\n Furthermore, markets that have already been rising for an extended period can maintain their upward momentum for much longer than investors anticipate, which helps explain why repeatedly waiting for a meaningful correction can lead to prolonged periods of inactivity.<\/p>\n\n\n\n Naturally, this does not mean that stock prices always rise after reaching new highs, or that sustained bull markets are immune to sharp corrections. Historical market declines demonstrate that even the strongest upward trends can eventually reverse, sometimes resulting in substantial losses over relatively short periods. Nevertheless, the tendency of market highs to cluster highlights why a record price, considered in isolation, provides limited information about the direction of future returns.<\/p>\n\n\n\n When we combine the historical evidence from J.P. Morgan and BlackRock, a consistent message emerges: attempting to time the stock market can carry a substantial opportunity cost, while investing at all-time highs has historically delivered returns that are competitive with those achieved at other entry points.<\/p>\n\n\n\n The J.P. Morgan analysis demonstrates how missing a relatively small number of the market’s strongest trading sessions can dramatically reduce long-term investment performance, particularly because many of those sessions occur during periods of extreme volatility when investors are least comfortable holding equities. Meanwhile, the BlackRock research shows that purchasing the S&P 500 at record highs has not historically been a disadvantage over longer investment horizons, challenging the intuitive belief that investors should always wait for prices to decline before committing new capital.<\/p>\n\n\n\n None of this means that investors should ignore valuations, disregard market risks, or assume that stock prices will continue rising indefinitely. Corrections, bear markets, and prolonged periods of disappointing returns remain unavoidable possibilities, making diversification, investment discipline, and an appropriate time horizon essential components of any long-term strategy.<\/p>\n\n\n\n However, there is a substantial difference between managing investment risk and attempting to predict every market correction, and the evidence suggests that investors frequently underestimate the potential cost of getting those predictions wrong.<\/p>\n\n\n\n For this reason, when investors ask me whether they should stop investing simply because stock markets are trading at all-time highs, my answer is that historical data provide very little support for that decision<\/strong>. Rather than focusing excessively on whether today’s prices represent a short-term peak, I believe long-term investors should concentrate on building diversified portfolios, maintaining an appropriate risk profile, and allowing time and compound returns to work in their favor.<\/p>\n\n\n\n After all, one of the most expensive mistakes an investor can make may not be buying stocks at an all-time high, but spending years waiting for an ideal entry point while the market continues to move forward.<\/p>\n\n\n\n Disclaimer: This article is intended for educational and informational purposes only and should not be considered personalized investment advice. Historical returns are not indicative of future performance, and investing in equity markets involves risk, including the potential loss of invested capital.<\/p>\n\n\n\n <\/p>\n","protected":false},"excerpt":{"rendered":" Stock markets are reaching record highs, leaving many investors wondering whether they should sell, wait for a correction, or continue investing. Historical S&P 500 data provide some surprising answers.<\/p>\n","protected":false},"author":1668,"featured_media":203132,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[147,8,12,153,148,7],"tags":[],"contributors-categories":[3678],"class_list":["post-219151","post","type-post","status-publish","format-standard","has-post-thumbnail","category-north-america","category-region","category-securities","category-stocks","category-text-articles","category-traders-insight","contributors-categories-forecaster-biz"],"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"\n<\/a>The Cost of Market Timing: What Happens When Investors Miss the Best Days?<\/strong><\/h2>\n\n\n\n
![\"sp](\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2026\/10\/SP-500-Returns-and-All-Time-Highs-1100x619.png\")
<\/figure>\n\n\n\n<\/a>Why the Best Stock Market Days Often Occur During Bear Markets<\/strong><\/h2>\n\n\n\n
<\/a>Is Investing at an All-Time High Really a Mistake?<\/strong><\/h2>\n\n\n\n
![\"sp](\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2026\/10\/The-Cost-of-Market-Timing-1100x619.png\")
<\/figure>\n\n\n\n<\/a>Why Stock Markets Can Continue Rising After Reaching Record Highs<\/strong><\/h2>\n\n\n\n
<\/a>Conclusion: All-Time Highs Are Not a Reason to Stop Investing<\/strong><\/h2>\n\n\n\n