Investing at all-time highs & Reading Consumer Confidence

One of the most common investor concerns is whether it makes sense to invest when markets are at all-time highs. Research from J.P. Morgan Asset Management, using data from FactSet and Standard & Poor’s, shows that new highs are not signals to avoid the market, they are often a sign of strength. The S&P 500 has historically continued to generate positive returns after reaching new highs, as strong fundamentals and earnings growth tend to drive markets higher over time. Waiting for a pullback can often result in missed opportunities rather than reduced risk.

Consumer confidence tells a different, but complementary story. Data from the University of Michigan, highlighted below, shows that investor sentiment can be misleading. Periods of low confidence have historically been followed by stronger market returns, while periods of high confidence have produced more muted results. This suggests that sentiment tends to lag reality and investors feel worst near market lows and best near market peaks.

When you combine these insights, a clear pattern emerges. Investors often hesitate at market highs and feel most comfortable when confidence is elevated, but the data suggests the opposite approach is more effective. Strong markets can continue higher, and weak sentiment often creates opportunity.

The takeaway is simple: long-term success is driven less by timing and more by discipline. Staying invested through highs and lows, and not reacting to sentiment has consistently been a more reliable path to building wealth.

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