Yes, you can buy at an all-time high
One of the oddities about reporting on equities and financial markets is the mainstream media’s obsession with daily price movements and new record price levels. Websites are always harping on about the top 10 daily gainers or losers, and editors cannot resist breaking out the champagne every time an index hits a new high. It seems silly in the context that an index of shares has to continually reach new highs to deliver on the asset class’ risk-return promise.
A historic milestone
The public relations team at JSE Limited were not holding back recently, sharing a presser under the headline ‘JSE All Share Index (ALSI) hits historic 100000 points milestone’ around 23 July 2025. This level, they said, was 1000 times higher than its starting value of 100 points in January 1960. For those who care about long-term market returns, this represents an 11% annualised return over an impressive 65-years. There was good news for the short-term focused too, with the ALSI among the best performing markets globally year-to-date 2025.
Leila Fourie, Group CEO of the JSE called the milestone a powerful reflection of the resilience, innovation and operational excellence of the companies listed on the JSE. “This landmark demonstrates that investors continue to place their trust in the South African market and in the ability of our listed companies to drive growth and deliver value,” she said. “As the JSE, we are proud to provide a platform that enables capital raising, fuels economic expansion and creates opportunities for wealth creation across society.”
South Africa’s financial advisers and planners face additional challenges when stock markets hit record highs or lows due to clients’ fear and greed emotions kicking in. As markets peak, investors either want to sell out of their discretionary investments to lock in profits (fear) or throw more money at equities in the hope the momentum continues (greed). In either case, the adviser needs to step in to remind the client of his or her longer-term investing objectives. You might offer the tried and tested refrain: it is time in the market, not timing the market that delivers.
Price versus earnings outlook
You may also encounter clients who balk at investing more cash in the index at record highs, arguing that the index is too expensive. Their mistake is to conflate an index level or price with financial market prospects or earnings. A market can be at a record high, but still cheap based on the earnings outlook for its constituent shares. Duncan Lamont CFA® and Head of Strategic Research at Schroders sought to offer guidance in a recent article titled: ‘Is it a good idea to invest when the market is at an all-time high?’ He suggests being led by the data.
Lamont noted that many US investors had parked savings in cash, attracted by the high rates on offer through 2023, 2024 and 2025. “The thought of investing that cash-on-the-sidelines when the stock market is at an all-time high feel uncomfortable; but it should not be,” he wrote, adding that an analysis of stock market returns since 1926 supports pushing that cash into equities. It turns out that equity markets hit record highs more often than you imagine. Of the 1187 months since January 1926, the US market reached an all-time high in 363 (31%) of them.
Your writer was quite fascinated by Shroders’ findings and cannot recall a presentation that sliced the data in this fashion. The next revelation hints that those who rush in greedily when markets hit a new record might be onto a good thing. “On average, 12-month returns following an all-time high being hit have been better than at other times: 10.4% ahead of inflation compared with 8.8% when the market was not at a high,” Lamont said. “Returns on a two or three-year horizon have been similar regardless of whether the market was at an all-time high or not.”
Timing could cost you 90% of your potential return
The article offered some deep insights into 100-year returns on the US stock market. For example, USD100 invested in January 1926 would be worth USD103294 at the end of 2024 in inflation-adjusted terms, a growth of 7.3% a year. In contrast, a strategy which switched out of the market and into cash for the next month whenever the market hit an all-time high and went back into the market whenever it was not at a high, would only be worth $9922. “The return on this portfolio would have been 4.8% in inflation-adjusted terms; over long time horisons differences in returns can seriously add up,” Lamont said.
And that, dear reader, is yet another analysis that confirms the time in the markets versus timing the markets approach to equity investing. Mark Randall, Director of Information Services at the JSE was on hand to share some JSE ALSI facts. “Today, the index represents 125 listed companies on the JSE with a combined market capitalisation of R21 trillion, spanning a diverse range of sectors and geographies,” he said. “While the ALSI does not include every listed company, it remains a trusted benchmark, capturing 99% of the eligible market capitalisation on the JSE Main Board.”
Although the number of listings on the JSE has declined over the years, the index continues to power ahead. According to the JSE media release, the index has delivered robust growth since 2002 despite major corrections during the 2008-9 Global Financial Crisis and the COVID-19 pandemic. “The past five years were particularly dynamic, with the index rebounding strongly from pandemic lows, driven by commodity booms in gold and platinum; resilient corporate earnings; and improved investor sentiment,” the JSE wrote. Banking, mining and technology shares have fuelled the gains.
Funding economic growth
“We remain committed to advancing market development, improving access to capital for businesses of all sizes and ensuring that our exchange continues to evolve in line with international standards,” concluded Fourie. “This milestone is a reminder of the important role the JSE plays in enabling companies to grow, innovate and create jobs, which ultimately benefits the broader economy.” Overall, the JSE remains committed to providing a transparent, efficient and secure platform for issuers and investors alike, further cementing its position as the gateway to African capital markets.
As is common in an article of this nature, FAnews must inform readers that this article does not constitute financial advice. It is also important to keep in mind that past stock market performances are not indicative of future performances. If you need help deciding on your investment approach, then your best option remains to seek help from a financial adviser or planner. For advisers or clients who are concerned about record highs on domestic or offshore markets, the sensible refrain appears to be: Do not fret over all-time highs.
Record prices should not deter you
“It is normal to feel nervous about investing when the stock market is at an all-time high, but history suggests that giving in to that feeling would have been very damaging for your wealth,” Lamont concluded. “There may be valid reasons for you to dislike stocks, but the market being at an all-time high should not be one of them.”
Writer’s thoughts:
The data supports investing more rather than selling when markets hit record highs. Is this consistent with how you advise clients, or do you simply side-step this concern by advocating for regular monthly investments? Please comment below, interact with us on X at @fanews_online or email us your thoughts [email protected].
