When Markets Hit Records, Should You Still Be Buying?NASDAQ Composite IndexNASDAQ:IXICTradingViewThe Nasdaq IXIC is back at record highs. The S&P 500 SPX and Dow DJI have recently been there too. AI stocks are running again, AMD AMD has crossed the $1 trillion mark while traders stare at their screens and ask: Should I buy at the top? It's one of the most natural instincts in markets. We happily buy a TV after its price falls 20%, yet become suspicious when stocks do the opposite. Surely waiting for a pullback is smarter than buying at the highest price ever recorded? History makes that decision considerably less obvious. 🏔️ Records Aren't As Rare As They Feel The phrase “all-time high” sounds like an extreme event. In a market designed to grow over time, however, records are part of the journey. J.P. Morgan JPM examined S&P 500 returns going back to 1970 and found that buying at an all-time high produced an average 12-month price return of 9.6%. Buying when the market wasn't at a record produced 9.4%. Over two years, the respective averages were 20.2% and 18.9%. That's not evidence that buying records always works. It certainly doesn't. But it does show something important: the mere existence of a record hasn't historically been a particularly useful sell signal. After all, every journey from 1,000 to 2,000 requires making plenty of new highs along the way. 🧠Your Brain Has a Different Idea So why does buying at records feel so uncomfortable? Anchoring plays a role. Suppose you watched the S&P 500 trade 10% lower several months ago. Today's price can feel “expensive” simply because you remember the cheaper one. But the market doesn't know where you first started watching it. Since that previous price, earnings estimates may have risen. Interest-rate expectations may have changed. Companies may have introduced new products, improved margins or generated more cash. The economic outlook may be different. Price alone doesn't tell you whether something is expensive. Valuation does. A stock at $200 can be cheaper than it was at $150 if its expected earnings have grown quickly enough. 🚀 Momentum Is Real Too There's another uncomfortable truth: things going up have an annoying habit of sometimes continuing to go up. “Markets can remain irrational longer than you can remain solvent.” Markets trend because fundamental improvements rarely happen for one day. Earnings can grow for years. That said, Q4 earnings season is almost upon us, check what’s coming soon in the Earnings Calendar. New technologies can create multi-year investment cycles. Economic expansions can persist. Institutional money can continue flowing toward the same themes. ⚠️ But Records Don't Make Risk Disappear None of this means traders should blindly hit the buy button whenever an index prints a new high. Today's market has very real complications. The Fed has resumed raising rates USINTR . The US 10-year Treasury yield just climbed to its highest level since 2007 (ref: Yield Curves tool) after surprisingly strong business-activity data. Oil remains elevated and markets are still navigating inflation, geopolitics and extremely high expectations around AI spending. ⏰ What About Waiting for the Dip? We’ve all been there: I'll buy when the market falls 10%. Pullback any minute now. There's one problem. The market might rise 15% first. A subsequent 10% correction would leave prices above where you originally decided they were too expensive. And even when the correction finally arrives, human psychology creates another obstacle. At today's record, you're waiting because stocks feel expensive. During a 10% correction, you'll probably encounter frightening headlines explaining why stocks are falling. Suddenly you're waiting for another 10%. Trying to find the perfect entry can quietly become never entering at all. 🛒 You Don't Have to Buy Everything Today Fortunately, investing isn't a choice between all in and sit in cash until the crash. Investors worried about entering near records can spread purchases across time. Dollar-cost averaging (DCAing) means investing predetermined amounts at regular intervals rather than trying to identify the perfect entry. If markets continue higher, some money is already participating. If markets fall, later purchases happen at lower prices. For active traders, the framework is different. Record highs can be useful information about momentum, but position sizing, support levels, earnings expectations and risk management still determine whether a particular setup makes sense. Different time horizons require different decisions. One stat in particular makes this piece work: 9.6% average 12-month returns after an all-time high versus 9.4% on non-record days since 1970. Off to you: How do you respond to an all-time high? Buy, wait, or sell?