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With Markets Charging Towards New Highs, Should Investors Wait for a 'Better Deal'?

With the relatively unprecedented strength we have seen in global equity markets over the past ~2.5 years (with one rather extreme hiccup in between), some investors may be apprehensive about investing in equity markets going forward.

This age-old market-timing predicament appeals to both reason and natural emotional biases. Emotionally, when you buy anything, it feels good to get a “good deal” and buying after large market run ups may not feel like a “good deal”. From a more rational standpoint, it is incredibly disadvantageous to one’s financial future to invest at historic market tops such as those we saw in the Dotcom bubble and 2008. While these historic events are certainly painful outliers, both data and market mechanics support investing at new highs or rather not “waiting for a better price.”

Average cumulative S&P500 total returns
Investing in new highs Vs buying the dips