Why Buying at All-Time Highs May Not Be a Bad Idea

July 15, 2025 2 min read

Challenging Market Myths with Hard Data

Recent insights from Peter Mallouk reveal an unexpected fact about investing at all-time highs (see image below). An analysis of S&P 500 total returns over the past 35 years shows that money invested at all-time highs actually performs better than investments made on any other day.

For instance, during a one-year holding period, the average returns on all-time high days were 13.5%, compared to 11.1% for investments made on non-all-time-high days. This trend continues over longer periods: over three years, returns were 44% from all-time high entries versus 39% otherwise; over five years, the returns were 82% compared to 74%.

Why All-Time Highs Can Still Offer Value

A common belief is that purchasing at record highs carries a higher risk. However, the data suggests that all-time highs often indicate ongoing market strength. Markets typically follow a record high with several more before experiencing any significant correction.

Of course, there are exceptions—some all-time highs towards the end of a rally may precede a downturn. Nonetheless, over the long term, the odds favor buying at all-time highs rather than waiting for dips that may never happen.

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The Fear of Buying High Is Often Misplaced

These findings challenge a deeply ingrained emotional belief: the fear of buying when prices seem excessively high. Statistically, this fear is not justified. Especially in momentum investing, setting aside that fear and focusing on data-driven strategies can yield better results.

Key Takeaway

Investing at 52-week highs or all-time highs need not be avoided. The likelihood of long-term outperformance remains strong even at these points.

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    Why Buying at All-Time Highs May Not Be a Bad Idea