Markets Are Back at All-Time Highs – Now What?

As of April 30, 2026, the S&P 500 closed at 7,209 — a new all-time high. In 2025 alone, the market set 39 new records. So far in 2026, it has set 11 more.

With every new milestone we hear a familiar question from clients: Should we take some chips off the table?

It’s an understandable impulse. And it certainly can make sense to prudently rebalance back to your targeted mix of stocks and bonds – but much beyond that can prove costly.

After a long stretch of gains, sitting at record levels can feel a little like pausing on a high ledge after a long hike up a mountain — the view is remarkable but all you can think about is how far down the ground is. The memories of 2000, 2008, and early 2020 are still fresh for many of us. Each of those painful declines followed periods of strong markets and our brains are wired to connect those dots — quietly convincing us that something bad is right around the corner.

But here’s what the evidence consistently shows: a market at a new high is typically not a market about to crash. Most of the time, it’s a market about to make another new high.

Below, we explain why that’s true, why it doesn’t always feel that way and what we believe actually matters when it comes to growing and protecting your wealth.

Why We Feel the Urge to Sell

The instinct to sell at a record high usually comes from one of three places:

What goes up must come down. This idea works well for thermostats and bouncing balls. It doesn’t apply to the stock market. The stock market isn’t trying to return to some fixed “normal” level. It reflects the future profits of thousands of real businesses — companies that make things, sell services and products, and grow over time their earnings over time. As the businesses earn more money, the value of their stock tend to prices rise.  Put another way, stocks follow earnings. There is no ceiling they are supposed to pull back from.

We remember the crashes, not the records. The dotcom bust, the 2008 financial crisis, and the COVID collapse all arrived after markets had been doing well. Those events left many investors scarred. But for every all-time high that preceded a major crash, there have been dozens that simply led to more all-time highs. We tend to forget those, because nothing dramatic happened afterward.

Gains feel fragile. There’s something deeply human about not wanting to give back what you’ve earned. Psychologists tell us people feel the pain of a loss roughly twice as much as they feel the pleasure of an equivalent gain. That’s a useful instinct in many areas of life, but it’s been a poor guide for investment decisions.

What History Actually Shows

Nearly every study that has examined this question reaches the same conclusion: future returns from all-time highs are not lower than average. They are typically higher.

This surprises many people, but it makes sense when you think about it. Bull markets — periods when stocks are rising — are defined by a long run of new records. That’s not a warning sign. That’s what a healthy, rising market looks like.

Why New Records are Perfectly Normal

It can help to ask the opposite question: what would it look like if the market stopped making new highs? It would mean businesses had stopped growing, the economy had stalled, and the future looked worse than the past. That’s the scenario worth worrying about — not a new record. New records aren’t a warning. For a long-term investor, they’re simply the expected outcome.

The Real Cost of Stepping Aside

Selling at an all-time high can feel like a reasonable, cautious move. But it carries three real costs that can compound against you over time.

Getting back in is harder than getting out. Deciding to sell is one decision. Deciding when to buy back in is a much harder one. Markets bottom and rebound well in advance of the news turning positive — and that’s not a coincidence, it’s how markets work. During the 2008-2009 financial crisis, the S&P Bank Index hit its lowest point in early 2009, when only 8% of the eventual bank failures had actually occurred. The news was still getting worse; the market had already turned. The same pattern played out in Europe’s 2012 debt crisis where European stocks bottomed during the worst of the turmoil — yet unemployment continued rising for another two years after the recovery had already begun.

The same psychological wiring that made the sale feel smart tends to make every subsequent rally look like a “false start,” and every dip look like confirmation that more drops are coming. Investors who exit at perceived peaks rarely re-enter at lower prices. The data on market timing is not kind.

Missing the best days. A small number of very strong trading days account for a disproportionate share of long-term returns. And those big up-days tend to cluster around periods of uncertainty — exactly the moments when an investor who has cashed out is unlikely to be back in. Miss a handful of the market’s best days over a decade and the impact on your final balance can be significant.

Paying taxes you don’t have to pay yet. If your investments are in a taxable account and they’ve grown, selling means paying capital gains taxes now — a guaranteed bill, paid today, to avoid a loss that may never actually happen.

What We Actually Pay Attention To

None of this means a market at record highs deserves no thought. They do! But the right questions are different from the ones the headlines tend to ask.

Are stock prices reasonable relative to what companies are actually earning? A record market where stocks are priced fairly is a very different situation from one where prices have run far ahead of reality. We watch this closely, both for the market broadly and — more importantly — for each individual company we own on your behalf.

Has anything grown out of proportion? When one investment appreciates significantly, it can drift to a larger portion of the portfolio than we originally intended. We address that continuously, as part of our regular portfolio management — not in a reactive scramble when the index hits a round number.

Have your personal circumstances changed? If you’ll need cash soon, have an upcoming major expense, or your life situation has shifted, those are real and meaningful reasons to revisit your plan.

Do we still believe in the businesses we own? This is the one we return to most often. The best defense against an unpredictable future is owning durable, well-run companies at sensible prices — ones that can grow through whatever the next several years bring.

How NPF Manages Your Portfolio

Our job is not to predict where the market goes next. Nobody can do that reliably — and anyone who claims otherwise is not being straight with you. What we can do, and what we believe we are here to do, is own a thoughtfully built portfolio of quality businesses — ones we have analyzed carefully and purchased at reasonable prices.

When we do decide to reduce the amount of stocks held in your portfolio, the decision flows from your personal financial plan — not from market levels. We rebalance when your mix of stocks and bonds drifts from your long-term targets, doing so in a way that is mindful of your tax situation so that getting back on track doesn’t come with an unnecessary tax bill. Done well, rebalancing and tax planning work together, not against each other. Ultimately, the decision to reduce stocks is driven by your financial plan – not a gut feel on direction the market.

If the past several decades has a single lesson for long-term investors, it’s this: staying invested in good companies — through the scary headlines and the all-time highs alike — has been the most reliable path to growing and protecting wealth over time. We see no reason to expect the next several decades to teach a different lesson.

At NPF Investment Advisors, our nearly 100-year history has reinforced this same lesson again and again: staying disciplined and invested in strong businesses has proven to be the most dependable path to long-term success.