The Long Term Investor

Should You Move to Cash When Markets Hit All-Time Highs? (EP.227)

Oct 22, 2025
Navigating record market highs can be tricky. All-time highs are normal and shouldn't trigger panic. Behavioral traps often lure investors into the cash-out mindset. Strong earnings and fundamentals are buoying valuations. Is the hype around AI creating a market bubble? Timing the market is risky—getting it right once is challenging enough, let alone twice. Instead of rushing to cash, reassessing portfolios and allocations is crucial. Stay disciplined and focused on long-term strategies.
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INSIGHT

New Highs Are Normal Market Behavior

  • All-time highs are normal when you own stocks and happen frequently over time.
  • Treat new highs as part of long-term market cycles, not automatic warnings to sell.
INSIGHT

Valuations Guide Expectations, Not Timing

  • Valuations matter for long-term returns but poorly predict short-term moves.
  • Use valuation metrics like the CAPE to set expectations, not to time the market.
INSIGHT

Earnings And Fundamentals Support Prices

  • Earnings strength and healthy balance sheets help justify higher prices today.
  • Positive corporate fundamentals and expected Fed cuts support investor buying.
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