The S&P 500 has spent much of 2026 near all-time highs, even as the Federal Reserve raised its benchmark interest rate on September 16, 2026 to a target range of 3.75% to 4% to keep inflation in check.(1) Stocks climbing while the Fed moves the other way from what many investors expected is exactly the kind of mixed signal that makes “should I buy now?” a harder question than it looks.
It’s a fair question. Valuations remain above their 10-year average, and corporate earnings keep beating estimates — two signals pulling in different directions.(2),(3) Whether you’re deploying new capital, managing gains or reassessing your asset allocation, the right call comes down to your time horizon, sector exposure, valuation discipline and risk tolerance more than headline sentiment.
This isn’t a moment for blanket moves. It’s a time to look at where you are, what you own and what still fits — and, as always, keep in mind that past performance doesn’t guarantee future returns and any investment puts your capital at risk.
Markets have climbed sharply over the past year, leading some investors to wonder if they’ve missed the opportunity. The short answer: not necessarily, but valuations aren’t cheap.
The S&P 500’s forward 12-month price-to-earnings (P/E) ratio sits at 19.2 — below its five-year average of 19.8, but still above its 10-year average of 19.0, and a more moderate starting point than earlier in the year, when the same multiple briefly topped 20.(2),(3) If you’re investing for the long term, a valuation near its recent historical range isn’t on its own a reason to stay out of the market. But if you’ll need the cash within the next few years, a portfolio concentrated only in stocks may carry more risk than you want.
Trying to time the perfect entry point is rarely productive. A more reliable approach for most investors is to stay invested consistently, adjusting only when your goals, risk tolerance or time horizon change.
The market backdrop right now is genuinely mixed:
This isn’t a clear “buy everything” environment, but it’s also not a time to avoid stocks entirely. Being selective, and understanding what you already own, likely matters more now than during broad, evenly distributed bull markets.
Choosing what to buy today depends less on timing the market and more on sector positioning, earnings visibility and how much risk you’re willing to take.
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Stock selection today may be less about chasing themes and more about aligning exposure with what you believe the next 12–24 months will look like. Favor companies with clear earnings visibility, durable margins and balance sheets built to handle further rate volatility.
Selling during a volatile or uncertain market can feel like the safe move, but it often does more harm than good.
Selling purely out of caution when markets are elevated can mean missing further gains. Historically, the S&P 500 has recovered from every major downturn, often reaching new highs within months or years.(9) Long-term returns tend to favor investors who remain consistently invested rather than attempting to time short-term exits and re-entries.
What’s more, missing the market’s best days can meaningfully hurt long-term returns. According to J.P. Morgan Asset Management’s own retirement research, an investor who missed just the 10 best trading days in the S&P 500 over a typical 20-year period would have ended up with roughly half the portfolio value of someone who stayed fully invested the entire time.(10)
Economist Burton Malkiel, a longtime advocate for index investing, has argued for decades that investors should never assume they can reliably time the market’s entries and exits, and instead recommends dollar-cost averaging into diversified index funds to reduce the temptation to sell out of fear.(11)
Frequent “return-chasing” — buying after a recent rise and selling after a dip — tends to reduce long-term returns, since it pushes investors toward buying high and selling low rather than the reverse.
A disciplined plan generally beats trying to time headlines. Finding the perfect entry or exit point is unreliable even for professional investors.
No one reliably times market bottoms, but some patterns hold up over time:
Waiting for perfect timing tends to cost more than it saves. Most long-term gains come from staying invested through imperfect, uncertain conditions — conditions that, in practice, are the norm rather than the exception.
With stocks still elevated, tech valuations stretched and the Fed still focused on inflation rather than cutting rates, holding cash can feel like the safer move.(1) But history generally favors staying invested over sitting on the sidelines. Holding excess cash preserves flexibility, but it also exposes you to inflation eroding your purchasing power and the opportunity cost of missing further gains.
Timing the market is harder than simply staying in it. Even modest allocations made during uncertain periods have historically outperformed waiting for a perfect entry point that rarely announces itself. If you’re holding more cash than usual, it’s reasonable to stay selective, but staying entirely on the sidelines carries its own risk. Investing doesn’t have to mean going all in, but it does mean staying in.
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