The Dilemma of the Record High Market

In the aftermath of President Trump’s address to the joint session of Congress, the stock markets are continuing their push to all-time highs. This scenario creates quite a dilemma for those of us in the investment advisory business. Do we continue to invest in stocks when the market is at record highs, or do we let cash build up in the accounts waiting for a pullback in stock prices? As we state quite regularly, our crystal ball is broken, and we cannot accurately predict the market’s next move.

Following is a link to an article by Charles Rotblut, CFA, the editor of the AAII Journal. He discusses this issue far more eloquently than I ever could. Please read the article by clicking here (linked with permission from the AAII editorial department).

Here is our takeaway from the article. The market may continue to go up, or it may pull back. We know, that at some point, the markets will correct, and the value of our investments will go down. This being said, we do not know the timing or magnitude of any future stock market corrections. These corrections could be as severe as 2008-2009, or as benign as 2015. This unknown actually helps us stick to our strategy of remaining fully invested in a properly diversified portfolio based upon the investor’s risk tolerance and goals, and continuing to invest at regular intervals regardless of where the market is. Please see our 1st Quarter 2017 Newsletter for a discussion and study on the effects of trying to accurately time the market’s ups and downs.

On another note, if you have any ideas for topics you would like to see addressed on our blog, please email me at