Buy high, sell higher? What history tells us about investing when stocks are near record highs

(NewsNation) — Investors generally want to buy low and sell high, but lately, buying low hasn’t been an option.

As of mid-January, the S&P 500 has closed at all-time highs three times in 2026, extending a rally that has pushed the benchmark to repeated records in recent years.

That momentum can make a slowdown feel inevitable, but history suggests fresh highs haven’t typically signaled that a rally is ending.

Here’s what decades of data tell us about what can happen when markets are running hot.

Record highs often lead to more all-time highs

Investing at the top of the market can feel risky, as if a downturn must be coming. Historically, that instinct has often been wrong.

From 1950 through August 2025, the broad U.S. stock market set 1,325 all-time highs — an average of more than 17 a year, according to RBC Global Asset Management.

Since the beginning of 2024 alone, the S&P 500 has notched more than 100 record highs, underscoring how often markets reach new peaks during sustained rallies.

Rather than signaling an imminent crash, record-high days often come in clusters.

“New all-time highs have typically led to further all-time highs,” said Naveen Malwal, institutional portfolio manager with Strategic Advisers LLC, in a recent Fidelity analysis. “That’s because generally, stocks have made new all-time highs when the economy and earnings were supportive for good growth.”

Data backs that up. RBC found that while market corrections after record highs do occur, they’re uncommon: “Looking out just one year from each all-time high in the S&P 500, market corrections greater than 10% have occurred only 9% of the time.”

When peaks take years to come back

It’s most investors’ worst fear: buying near a peak and watching the market plunge. That’s not the norm, but it has happened in modern U.S. history, sometimes taking years for the S&P 500 to surpass a prior peak.

Stagflation era (1973-1980)

Record high: January 11, 1973
New closing high: July 17, 1980
Gap: 7 years, 6 months

Dot-com era (2000-2007):

Record high: March 24, 2000
New closing high: May 30, 2007
Gap: 7 years, 2 months

Global financial crisis (2007-2013)

Record high: October 9, 2007
New closing high: March 28, 2013
Gap: 5 years, 5 months

Those downturns were painful for many and took years to recover from, but in each case, the market eventually moved on to new highs.

RBC’s calculations also suggest that investing in the S&P 500 only at all-time highs hasn’t historically been a major disadvantage. Over five-year periods, those investments returned 10.5% on average versus 11.4% for all other days.

Trying to time the market can backfire

It’s natural to see stocks at all-time highs and think, “Maybe I should wait for a dip.” The problem is that consistently timing those dips is close to impossible.

That’s why the old line says “time in the market” beats “timing the market” — over the long-run, major stock indexes tend to rise.

Historical data suggests the losses from bad timing may outweigh the benefits of good timing.

A Fidelity analysis looked at a hypothetical investor who put $5,000 into the S&P 500 every year from 1980 to 2024. It compared how much they would end up with in three scenarios:

Investing at each year’s peak (worst timing): $5,311,106
Investing at each year’s bottom (best timing): $6,968,688
Investing on January 1 each year: $6,397,508

Perfect timing helps, but only modestly, given how unrealistic it is. Meanwhile, simply investing at the start of each year produced more than $1 million in extra growth compared with always buying at the peak.

The bigger risk often comes from timing mistakes on the sell side. Missing just a handful of the market’s strongest days can meaningfully drag down returns. BlackRock ran the numbers on a hypothetical $100,000 investment in the S&P 500 from 2006 to 2025: