Don’t hide from markets at all-time highs – you’ll lose: Schroders

Yasmine Raso

Senior Journalist, Financial Newswire

29 July 2025

New analysis from Schroders has urged investors to put aside their concerns of a crash and ride the wave when it comes to investing in the stock market at its all-time high.

According to Duncan Lamont, Head of Strategic Research at Schroders, tracking the historical movements of the stock market and its correlation to wealth growth has indicated that investors could lose between 27 and 90 per cent of their wealth if they switched out of the market and into cash.

“After crashing hard in April, the US stock market rebounded even harder, recently hitting a new all-time high. This has left many investors feeling nervous about the potential for a fall,” he said.

“Many others have parked savings in cash, attracted by the high rates on offer. The thought of investing that cash-on-the-sidelines when the stock market is at an all-time high feels uncomfortable. But should it?

“The conclusion from our analysis of stock market returns since 1926 is unequivocal: no. The market is actually at an all-time high more often than you might think. Of the 1,187 months since January 1926, the market was at an all-time high in 363 of them, 31% of the time.

“And, on average, 12-month returns following an all-time high being hit have been better than at other times: 10.4% ahead of inflation compared with 8.8% when the market wasn’t at a high. Returns on a two or three-year horizon have been similar regardless of whether the market was at an all-time high or not.”

According to the data cited by Lamont, $100 invested in the US stock market in January 1926 would be worth $103,294 at the end of 2024 (adjusted for inflation), recording a growth of 7.3 per per year.

“In contrast, a strategy which switched out of the market and into cash for the next month whenever the market hit an all-time high (and went back in again whenever it wasn’t at one) would only be worth $9,922. This is 90% lower! The return on this portfolio would have been 4.8% in inflation-adjusted terms. Over long time horizons, differences in returns can seriously add up,” he said.

“This analysis covers a nearly 100-year time horizon, longer than most people plan for. But, even over shorter horizons, investors would have missed out on a lot of potential wealth if they had taken fright whenever the market was riding high.

“It is normal to feel nervous about investing when the stock market is at an all-time high, but history suggests that giving in to that feeling would have been very damaging for your wealth. There may be valid reasons for you to dislike stocks. But the market being at an all-time high should not be one of them.”