Don’t Be Afraid

I want to talk about the feelings we get when putting money to work at all-time highs.

But first, a quick programming note.

Two of the things I love the most are movies and business. Nobody talks about the intersection of my two favorite topics like Matt Belloni. I read him every week at Puck and listen to him every week on The Ringer’s The Town. I can’t wait to have him on a Live TCAF in Los Angeles on April 30th. If you’re in the area, we’d love to see you! Tickets here.

The stock market has given us something it hasn’t in a couple of years: Plenty of all-time highs. From 2013 to 2021, the S&P averaged just over 38 of these before vanishing into a bear market. It only happened once in 2022 and then nada in 2023.

We’re not even one-third of the way into the year, and there have already been 22 new highs in 2024.

All-time highs are interesting in the emotions they elicit. Some people might be euphoric as their accounts reach dollar amounts never seen before. Others might fear this is as good as it’s going to get and worry about a trap-door scenario.

Your emotional state might also depend on your asset allocation. If you’re sitting on a large cash pile, it’s understandable that you might be hesitant to go “all in” at a record price. It might not “feel” right.

The good news is the data doesn’t support those feelings. On average since 1970, the S&P 500 has done better 1, 3, and 5 years after making an all-time high than picking a random day.

I understand that feelings trump facts when it comes to investing. If you’re not comfortable putting money to work here, this data probably isn’t going to do much to change your mind. But if you’re one of these people, and I’m not judging I get it, ask yourself this; Do you think you’re likely to be less fearful if we do get a 10% correction or worse?

All-time highs are a great time to buy stocks*, even if it might not feel so at the time.

*On average. Don’t be mad at me if this is the top.