Investing after a $400k condo sale can be an exciting but daunting prospect, especially when the stock market hits new all-time highs. It’s natural to feel apprehensive about putting money to work in such volatile conditions. However, history shows that these peaks are often followed by more gains.
Since 1950, there have been over 300 new all-time highs in the S&P 500, averaging around one every 14 trading days. This trend is not unique to this decade; even over rolling 10-year windows, we’ve experienced an average of 170 new highs.
It’s essential to separate market history from present-day realities. The current run has been remarkable, and emotions can cloud judgment when dealing with a large sum of cash. A well-diversified portfolio can help mitigate risks.
Consider the following options:
Dollar cost averaging your investments over time can add a layer of predictability.
Allocating assets to a more diversified portfolio, including stocks, bonds, cash, and other investments, can spread risks and potentially lower expected returns.
Having a pre-established asset allocation in place is crucial, as it allows for impulsive decisions without weighing on emotional investments.
Josh Brown joined me to discuss the best course of action, including AI’s impact on financial advice and timing the next market correction.
Source: https://awealthofcommonsense.com/2024/12/investing-in-stocks-at-all-time-highs-2