Always be buying (ABB!)
The impact of dollar cost averaging is clear, but it’s also important to remember that buying at all-time market highs can have its advantages. Don’t let market peaks hold you back. Stay focused, stay consistent, and remember the mantra: Always Be Buying!
What is dollar cost averaging (DCA)
Dollar-cost averaging (DCA) is an investment strategy in which you invest a fixed amount of money at regular intervals, regardless of whether the market is up or down. Rather than trying to time the perfect entry, DCA helps smooth out the purchase price of your investments over time. This approach can help reduce the emotional stress associated with market volatility and mitigate the risk of investing a large sum just before a downturn. It’s particularly appealing to long-term investors seeking to build wealth gradually while managing downside risk.
Data from: JP Morgan, Guide to the markets
Fear of Buying at Highs
One of the most common psychological barriers investors face is the fear of buying at all-time highs. Many worry that investing when markets are elevated sets them up for an imminent drop. However, the left side of the chart tells a different story. Historically, the S&P 500 has made numerous all-time highs, reflecting the broader trend of long-term growth. The data show that since the start of 2024, the S&P 500 has already reached 62 new highs, with approximately 6.7% of trading days closing at a record level. Moreover, nearly 30% of those highs ultimately became “market floors,” meaning prices didn’t drop below those levels afterward, underscoring that new highs are often not ceilings but stepping stones to further growth.
Returns After Buying at Highs
The right-hand side of the chart provides powerful evidence that investing at all-time highs has historically not been a disastrous choice. From 1988 to the end of 2024, the average cumulative returns after buying the S&P 500 at a new high were very similar—and in some cases slightly higher—than returns from investing on any random day. For example, over five years, investing at all-time highs yielded an average cumulative return of 80.9%, compared to 74.7% for investing on any day. Even shorter-term returns are not dramatically different. This challenges the notion that buying at highs is inherently dangerous and supports the idea that staying invested—regardless of market levels—often pays off over time.
DCA Helps Bridge the Emotional Gap
Dollar-cost averaging provides a practical approach to overcome the fear of investing at market highs. Instead of waiting for the “perfect dip,” investors steadily add to their portfolios, which helps capture both highs and lows. The data shows that the market’s upward bias over time has rewarded consistent investors, whether they entered at highs or not. For investors concerned about market timing, DCA combines discipline with the statistical evidence presented in the chart above: investing—even at new highs—has historically yielded solid returns, especially when given sufficient time to compound. The key takeaway is that long-term investing and consistent contributions often trump trying to predict short-term market movements, and to ABB, Always Be Buying!
To learn more about how Whitaker-Myers Wealth Managers can help you on your journey, schedule a meeting with one of our financial advisors. If you desire, and are data nerdy like I am, don’t hesitate to reach out to me so we can dive deep into market data that may provide additional insight to your journey.
Always Be Buying (ABB!): Why Consistency Beats Timing in Long-Term Investing
July 14, 2025
Summit Puri
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