A record high is a milestone, not a reliable forecast of what stocks will do next. In Vanguard’s historical S&P analysis, average returns after all-time highs were slightly higher over one, three and five years, but lower over ten and twenty years than after other trading days. Those averages conceal losses and severe drawdowns, so a record alone is not a reason to buy, sell or wait.
What counts as a record high?
An all-time high means an index has reached a new peak in its price history. It describes where the market has been, not what it is likely to do next. A record in a broad index also does not mean every stock, or any one investor’s portfolio, is at a high.
Vanguard found that all-time-high days accounted for less than 10% of trading days in its historical sample. Their relative rarity does not make them a dependable warning of an imminent decline.
What happened after past all-time highs?
Vanguard Investment Advisory Research Center compared average cumulative S&P price returns after days that set an all-time high with returns after other trading days. The figures below are historical averages through September 24, 2025—not forecasts or guaranteed investor returns.
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| Holding period | After all-time-high days | After other days |
|---|---|---|
| 1 year | 9.5% | 9.2% |
| 3 years | 30.2% | 28.5% |
| 5 years | 55.8% | 51.9% |
| 10 years | 108.8% | 121.8% |
| 20 years | 243.1% | 348.8% |
The comparison slightly favored highs over one to five years, while other starting days had higher averages over ten and twenty years. It does not establish that buying at a high is better or worse for a particular investor: the result changes with the holding period, and an average does not show the range of individual outcomes.
Does a record high mean a crash is coming?
No conclusion about an impending crash follows from the milestone alone. Vanguard’s historical experience included negative returns and drawdowns exceeding 40% regardless of whether the market started at an all-time high. A decline can follow a record, but the record itself is not a reliable short-term alarm.
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That distinction matters because an average return can be positive even when some investors experienced substantial losses along the way. The historical figures do not predict when a drawdown might occur or how deep it could be.
Should you invest now or wait for a pullback?
The historical comparison does not identify the best day to invest, and it does not quantify the cost of waiting in cash. Waiting may avoid an immediate decline if one occurs, but it also means being out of the market if prices rise before a pullback arrives. The data do not resolve that trade-off for an individual.
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1Clear out junk files and repair common Windows errors2Scan for outdated or missing drivers - takes under a minute3Repair Windows errors before they cause bigger problemsVanguard’s guidance is to avoid making tactical market-timing decisions based on an all-time high or high valuations, and instead follow a strategic policy portfolio suited to the investor. In practical terms, consider whether your existing investment plan still matches your time horizon and ability to tolerate losses; do not treat a record by itself as a signal to abandon that plan. This is general context, not a personal allocation recommendation.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What the historical figures do—and do not—measure
Vanguard’s series uses S&P 90 price returns from January 3, 1950, through March 3, 1957, and S&P 500 Index price returns from March 4, 1957, through September 24, 2025. The figures are index price returns, not the realized results of an investable portfolio or a specific investor’s account. An index is not directly investable, and past performance does not guarantee future returns.
Vanguard states that “Market timing based on whether markets are trading at all-time highs or at high valuations is particularly challenging, especially in the short-to-intermediate time horizons.” Vanguard Investment Advisory Research Center’s analysis reports calculations using FactSet and Morningstar Direct and is based on data as of September 24, 2025.
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