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I get this question from friends and fam all the time - “With markets so high right now, should I really start investing in stocks?” Well, take a look: sp500

The graph visualizes that the S&P is “close to an all time high” almost all the time. An ATH value for the S&P500 shouldn’t discourage you from investing in stocks. The right time to invest is now.

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    I wonder how much of this is inflation or general growth of the economy. That’s why the Schiller PE Ratio is a ratio, right? Well, I suppose the people trying to time the market probably are just going off the raw numbers anyways.

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      Well, supposedly we know exactly how much of it is inflation, earning forecasts are reasonably accurate, and the rest is speculation/passive investing flows?

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      I get asked this constantly. People are debating whether they should sell their stocks, buy gold and wait out the next crash right around the corner. The truth is, nobody knows when the next crash is and even the most trustworthy experts are wrong more often than not. I came across this Chart of Shame today, a graph showing all the major predictions of a looming crash from top traders, journalists and economists over the past 6 years. In the meantime we’ve seen the market more than double.

      The best advice for retirement is to buy and hold - only reducing risk as you get closer to retirement.

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        Than you! I’ve actually been wanting this exact data set for a while. How did you prepare it?

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          It is not mine, but it looks like a closing price .csv from Yahoo! Finance (or Alpha Vantage, just found out about it - it’s pretty neat!) plotted on a log scale + if closing price within 5% of ATH { color: red }. You can play with yourself in Excel or matplotlib.

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          “almost all of the time” doesn’t mean much. is that 51% of the time, or 99% of the time?

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            According to these guys it’s 54% within 5% of ATH and 67% within 10% of ATH.

            You’re right, “almost all of the time” was a bit too enthusiastic 🙂

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            This only shows that being “close to an all time high” is not an argument against investing now. But that doesn’t make it an argument in favor of investing now. Some of these times were still less ideal times to step into the market.

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              I agree, but in all fairness it’s more of a “don’t try to time the market” kind of advice, rather than “buy at all time highs”.