Markets are up. Your portfolio looks strong.

So why does it feel like a drop is coming?

If you’ve ever thought, “This must be the top,” you’re in good company. That fear is hardwired into our brains.

But here’s the truth: Historically, investing at new highs delivers returns similar to buying at any other time.

This short read breaks down the psychology behind “that fear” and why the data tells a different story.

"It’s not about ignoring fear. It’s about understanding where it comes from and what the data actually says."

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It feels risky to invest when markets are riding high. But history tells a different story.

Over the past 70+ years, buying at all-time highs has delivered returns nearly identical to investing on any random day.

The average 1-year return after a market high? 11.2%. On other dates? 12.6%. At 3- and 5-year marks, the difference stays small.¹

Of course, past performance doesn’t predict future results.

But the numbers are clear: market highs aren’t a red flag. They’re part of the ride.

So if investing at highs isn’t actually riskier…why does it feel that way?

Blame anchoring bias: our tendency to fixate on the first number we see.^{^2}

Maybe you saw a stock at $455 a few months ago and waited. Now it’s $490.

It feels expensive, even if nothing’s changed.

This type of mental math leads to regret and inaction.

But markets aren’t priced for where they’ve been. They’re priced for where they might go.

Anchoring bias isn’t the only thing at play.

Our brains also exaggerate whatever happened most recently, especially if it ended badly.

That’s why highs feel scary.

If the last one you remember preceded a drop, that’s what sticks.

Not the years of growth. Just the drop.

It’s like a great vacation spoiled by an awful airport delay. One bad moment overshadows the rest.

Investing can feel the same.

One crash after a peak doesn’t make every high a warning. But your brain treats it like one.

Moreover, buying at new highs feels risky because it means surrendering control.

If the market dips, regret hits harder: “Why didn’t I wait?”

That’s regret aversion at work. We’d rather do nothing than risk feeling foolish.³

And sitting in cash creates a false sense of control, even though markets rarely follow our script.

This illusion of control can be comforting. But long-term success usually comes from staying consistent, not trying to outsmart uncertainty.

When markets are volatile, it can feel reasonable to take a cautious approach. But stepping out--even briefly--has historically come with tradeoffs.

From 2005 to 2024, a hypothetical $10,000 investment in the S&P 500 grew to $71,750 if left untouched the entire time.⁴

Missing just the 10 best days during that same period would have reduced that value to $32,871--a much lower outcome over two decades.⁴

It's also worth noting that 7 of those 10 best days occurred within two weeks of the worst days. That suggests some of the strongest gains tend to cluster around periods of heightened uncertainty.⁴

While past performance doesn't guarantee future results, this underscores how difficult it can be to predict the right moments to be in or out of the market.

The bottom line…

Feeling anxious at a market high is normal. You’re not doing it wrong. You’re just human.

The key is knowing how your brain might be playing tricks on you and building a plan that keeps those instincts in check.

If you’re not sure what to do next, that’s okay. Let’s figure it out together.

Sincerely,

Gregg Hartmann

Senior Wealth Manager

(303) 283-5900

P.S. Sign up for my emails. My subscribers get my best insights.

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Gregg Hartmann

Senior Wealth Manager

https://summit.ceterainvestors.com/

gregg.hartmann@ceterainvestors.com

(303) 283-5900

1. Bloomberg, RBC GAM, 2024 [URL: https://www.rbcgam.com/en/ca/learn-plan/investment-basics/investing-at-all-time-highs/detail]

2. The Decision Lab, 2025 [URL: https://thedecisionlab.com/biases/anchoring-bias]

3. The Decision Lab, 2025 [URL: https://thedecisionlab.com/biases/regret-aversion]

4. CNBC, 2025 [URL: https://www.cnbc.com/2025/04/07/selling-out-during-the-markets-worst-days-can-hurt-you-research.html]