Most of us are bargain hunters by nature. Whether it’s finding a vintage coffee table on Facebook Marketplace or waiting until Black Friday to buy those shoes you’ve wanted, we like feeling we’ve got a good deal.
So it’s understandable to feel a little uneasy about investing when markets are at all-time highs. Last week both the S&P 500 and Nasdaq hit fresh records, as technology companies continue to drive growth in both indexes as AI optimism fuels the market. When markets are this high it can be tempting to think you’d be better off waiting on the sidelines.
Unfortunately, sharemarkets don’t come with an annual Black Friday sale. Prices can fall, sometimes by a lot, but there’s no certainty about when the next drop will arrive or how far the market might climb before it happens.
A record high is not, on its own, a reliable signal of what the market will do next. For long-term investors, waiting for a bargain carries the risk of missing out on gains.
An all-time high isn’t necessarily the top
The phrase ‘all-time high’ can make it sound like the market has reached its limit and has nowhere to go but down. However, a record high doesn’t necessarily mean the market has hit its ceiling. Markets have set new highs many times before, and further growth necessarily requires them to keep doing so. Unlike that second-hand table on Facebook Marketplace, companies are constantly looking to grow their businesses and profits over time, which in turn can support higher share prices.
However, it’s also important to remember that past highs offer no guarantee about the next move. Share prices reflect many factors beyond expectations about company earnings, including interest rates and investor sentiment. Companies do not always grow profits, and profit growth does not guarantee a higher share price.
Research from J.P. Morgan puts this into perspective. Its latest Guide to the Markets paper examined S&P 500 data from 1988 to 2025 and compared investing at a record high with investing on any trading day.
Average cumulative S&P 500 total returns
(1/1/1988 to 31/12/2025)
Average cumulative S&P 500 total returns (1/1/1988 to 31/12/2025)
| 1 year | 2 year | 3 year | 5 year | |
|---|---|---|---|---|
| Invest on any day | 12% | 26% | 41% | 76% |
| Invest at a new high | 14% | 29% | 46% | 82% |
Source: FactSet, Standard & Poor’s, J.P. Morgan Asset Management. As at 30 September 2026. “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 1-year, 2-year, 3-year and 5-year intervals over the period. You cannot invest directly in an index. Past performance is not an indicator of future performance.
These are historical averages for one US sharemarket index; they do not show that a market is more likely to rise after any particular high, and markets may fall sharply after a record high. But they do challenge the assumption that a record high is automatically a bad entry point. For long-term investors, sitting on the sidelines has its own risks: markets can move higher or lower while you wait.
What waiting for a correction can mean
Sitting on the sidelines and waiting for a decline in the market can sound like a sensible thing to do. With all the volatility in global energy markets and the geopolitical state of the world currently feeling forever uncertain, holding on to your hard-earned savings can feel safe.
But you could be waiting years for the market to fall to an opportunity to enter, and by that time have missed out on time in the market.
Using S&P 500 total returns from 1990 to 2024, research from UK bank Coutts found that investing on the first day of each year produced average annual returns of 12.1%. Someone waiting for a 10% correction and then investing, however, saw a 6.6% return. And only around half of the years between 1990 and 2024 experienced a correction of 10% or larger, leaving the hesitant investor in cash through those years.
And there’s another psychological consideration about waiting for a market fall: even if you set yourself a goal of investing when the market fell by 10%, would you actually invest when the market fell? It’s easy to promise yourself you will, but when the time arrives and all the headlines in the news are focused on how the market has further to fall, will you be able to hold your nerve?
Building a regular investing habit
Making a decision to invest at all-time highs can be as much a mental hurdle as a financial one.
This is where dollar-cost averaging and automated investing can help remove emotion from decision-making and help you stay aligned to your long-term investing strategy. Investing a set amount at regular intervals, such as after each payday, means you’re buying through both the highs and the lows. Your money buys fewer units when prices are higher and more when they’re lower, which in turn can smooth out the price.
Automating that process can help you follow through. Betashares Direct’s Auto-invest feature lets you schedule recurring investments into up to five Betashares ETFs, making it easier to stick to your plan when headlines make you hesitate. So, although sitting on the sidelines and waiting for a cheaper couch to pop up on Facebook Marketplace might be the right approach when furnishing your house. In the sharemarket, waiting indefinitely for a discount can end up costing you in the long run.