“The All-Time High Dilemma: Why 2025’s Records Are Just Another Step”

The 2025 Market Story So Far

As we head into the final quarter of 2025, it’s hard to ignore the headline: the stock market is setting records again. The S&P 500 index recently surpassed the 6,800 mark, closing at a new all-time high of around 6,875 at the end of October. This strong performance marks a significant run, with the S&P 500 delivering a year-to-date return of approximately 17% (excluding dividends) since January 1st.

This rally hasn’t been without its twists. We’ve seen significant volatility, including a sharp dip in the early spring, followed by a powerful rebound fueled by better-than-expected corporate earnings and growing optimism for a potential interest rate cutting cycle by the Federal Reserve. However, when the market keeps hitting new highs, a common question pops up in nearly every client meeting: “Should I be nervous? Is this the peak?”

It’s an entirely fair question. When every financial headline screams “record high,” the natural inclination is to worry that the only direction left is down. But as financial advisors, our job is to look past the headlines and anchor our strategies in data and history.

The Truth About Investing After a Record High

Let’s look at the data—specifically, the performance of the S&P 500 over the last 50 years. What actually happens in the 12 months after the market hits an all-time high?
If you feel like all-time highs are rare events, think again. The market spends a considerable amount of time near or at its peaks, as the overall trajectory of economic growth is upward. Looking back through history, the data offers a powerful counter-narrative to market fear:

1. Positive Returns Are Not Rare: Looking back over the last 50 years, the S&P 500 has consistently shown that a new high is not a sign of an immediate reversal. Returns in the 12 months following a fresh all-time high are varied, but often positive. For example, recent periods saw significant double-digit gains (such as the +25% returns seen after highs in 2023 and 2024). Conversely, peaks can precede sharp declines (like the approximately -19% total return experienced after the March 2000 peak, adjusted for inflation). The historical evidence confirms that while short-term volatility is always possible, the long-term tendency remains overwhelmingly upward.

2. More Gains Follow: Far from immediately collapsing, in the majority of historical instances over the last five decades, the market was higher one year after reaching a record.

3. The “Peak” is Just a Step: Reaching a new high isn’t an ending; it’s simply a step along the path of long-term growth. The biggest threat to your portfolio isn’t hitting a new high, but rather succumbing to the temptation to sell out of fear of a temporary correction.

The lesson from history is clear: waiting for a pullback after a new high usually means missing out on further gains.

A Long-Term Tool, Not a Short-Term Gamble

While we can use history as a guide, no advisor can predict what the market will do over the next six weeks, six months, or even the next year. We don’t know if geopolitical tensions or corporate profits will lead to further gains or a temporary dip.

What we do know is that for investors with a long-term time horizon—meaning five years or more—the stock market remains the single most powerful tool for building wealth. Over the past century, the S&P 500 has consistently delivered an annualized return of around 10% (before inflation), despite weathering two world wars, the Great Depression, the Dot-Com crash, and the 2008 Financial Crisis.

The key to navigating all-time highs is discipline. Focus on time in the market, not timing the market. Stick to your customized allocation, utilize dollar-cost averaging to remove emotion from your buying decisions, and ensure your portfolio is well-diversified.

Don’t let the noise of market records distract you from your ultimate financial goals. The best move, nearly always, is to stay the course.