It’s been a good year so far for index investors as US, global and Canada indices hit all-time highs. At the time of this writing the S&P 500 is up over 13% from the start of the year. The FTSE 100 is up 11% and Canada’s TSX is up 19%. Despite tariff threats and geopolitical tensions, the stock market has continued marching upward, buoyed by weaker than expected US inflation numbers, a confident consumer and the hopes that AI will deliver cost savings and record profits for every type of business imaginable. The US Federal Reserve’s September interest rate cut of 25 basis points has further encouraged investor sentiment during what is historically a poor performing month. Septem’bear’ is now effectively known as ‘Septem-‘bull’.

Which begs the question, how much higher can this thing go? Should you continue investing at record highs, or is it only a matter of time before the market plummets to lows not seen since 2022? Perhaps you have been sitting in cash since Liberation Day, waiting for the right entry point. Is now the right time to get back in?

First, a quick reminder that nobody ever knows what the market is going to do. Not me, not you, not Warren Buffet, and certainly not the line-up of sexy hedge fund managers on CNBC. Secondly, if you need the money in the next five to 10 years, say, to scoop up one of Toronto’s half-priced condos, then you’re probably going to want to keep that money out of stock market. As we’ve discussed, the stock market can be extremely volatile. While historically it has gone up over time, volatility, frequent selloffs, common corrections and the occasional 20-50% bear market are all part of the process. There is a chance that you could invest your money now and not see it recover for years.

But for those of us long-term investors who are comfortable with the stock market’s risk and volatility, we may still be nervous investing at such nosebleed levels. Maybe it’s better to wait until the market corrects. But when will that be? October? November? Early 2026? And if it corrects, how will we know that it’s not going to crash further? For that reason, I personally always invest whenever I have the cash. This means that yes, there have been times when I have unknowingly clicked the ‘buy button’ right before a drop. Most recently, I invested in February right before April’s Liberation Day when the market dropped a whopping 18%! If I could have timed it perfectly, I would have known the market was going to tank in April and go on to recover a stunning 33% by September. I would have held onto my cash, slipped it into the market right after it crashed in April, sat back and watched my money grow 33% while eating a bowl of tariff-free popcorn.

But of course, I had no way of knowing that the market was going to crash 18% in April, which is why I invested when I had the cash, at the top of the market in February. But you know what? The market has since recovered and gone on to reach new highs. My February investments are now up by 4% and have even paid out dividends along the way. It’s nice to think that if I had just waited for a crash then I would have been able to take advantage of April’s drop and buy even more shares at a discount price. But if I was really going to try to time the market, I would have needed to be sure that the market was not going to drop even further after I bought back in. How would I have known we had hit rock bottom? Truthfully, I would probably still be nervously waiting for an entry point all these months later, and I would have missed out on 4% gains and dividend payments.

But the market sure is looking toppy, isn’t it? What if we invest now, it crashes tomorrow, and it takes even longer to recover? Well, luckily Ben from A Wealth of Common Sense has put together a scenario based on investing during all-time highs and he has good news to share.

“Meet Bob,” he writes, “the world’s worst market timer.”

Bob began investing in a low-cost S&P 500 index fund in the 1970s. Unfortunately, he only ever invested at the peak of the market, right before a major market crash. He invested right before the Black Monday crash of 1987, the early 2000’s tech bubble and the 2007/08 financial crisis. It must have been very disheartening for Bob to see his hard-earned money drop by up to 50%! But luckily Bob had a secret weapon. He never sold, even when his investments were down. By not selling, not only was Bob’s money left to compound, but his dividends were re-invested at a lower price, allowing him to pick up more shares. Eventually the market recovered from each crash and so did Bob’s portfolio! Even though he only invested $184,000 over a 40-year period, Bob still ended up with 1.1 million by the time he retired in 2013.

So what’s the moral of the story? There is a famous investing quote, “time in the market beats timing the market”, and I think it captures Bob’s – and my situation perfectly. It means that since I can’t time the market, the next best thing is to get my money working for me as soon as possible, so that it has a chance to grow for as long as possible. That might mean that, like Bob, I accidentally invest at the top of the market, only to see my hard-earned money come crashing down. But I’m okay with that. For me, letting my money compound and generate dividends over time is far better than sitting on the sidelines waiting for a crash that may not come for years.

For you, it will depend on your investment strategy, risk tolerance, time horizon, overall faith in the stock market and how confident you are that you won’t sell in a downturn.

And for Bob? Hopefully he is celebrating his now multi-million-dollar portfolio as it hits yet another all-time high.

Disclaimer: I am not a financial advisor. None of this is financial advice. I encourage you to do your own research.