Buying XEQT at All-Time Highs: Why New Highs Shouldn't Scare You

In the fall of 2024, I had $8,000 sitting in my Wealthsimple account, ready to deploy into XEQT. It was money from a freelance project, and I had already decided it was going into my non-registered account. Simple enough.

Except XEQT was at an all-time high.

I remember staring at the chart, watching that line sit at the top-right corner of the screen, and thinking: “Maybe I should wait. It can’t keep going up like this. There has to be a pullback.” I told myself I was being “prudent.” I told myself I was being “smart.”

You know what happened? I waited three weeks. XEQT went up another 2%. I finally gave in and bought. Those three weeks of “being smart” cost me about $160 in missed gains. Not catastrophic, but annoying – especially because I knew better.

The thing about all-time highs is that they feel like the worst possible time to invest. Every instinct in your body screams “danger.” But the data says the opposite: all-time highs are the stock market doing exactly what it’s supposed to do, and buying at them has historically been just fine.

Let me show you why.

1. All-Time Highs Are the Normal State of the Stock Market

Here’s a fact that surprises most people: the stock market spends a remarkable amount of time at or near all-time highs.

Since 1950, the S&P 500 has set a new all-time high on roughly 7% of all trading days. That’s about once every two weeks, on average. In strong bull markets, it happens even more frequently – in 2024 alone, the S&P 500 set over 50 new all-time highs.

This makes perfect sense when you think about it. The stock market is a collection of companies that are, in aggregate, growing their revenues, profits, and dividends over time. As long as the global economy grows, corporate earnings grow, and stocks become worth more. The natural trajectory is upward.

If the market is “supposed” to go up over time, then new all-time highs aren’t a warning sign – they’re a sign that things are working as expected. The absence of new highs would actually be more concerning.

Think of it this way: if you tracked the salary of the average Canadian worker over 50 years, they’d hit “all-time high” income almost every year due to raises and inflation. You wouldn’t tell someone “don’t accept a raise because your salary is at an all-time high.” That would be absurd. The same logic applies to the stock market.

2. The Data: What Happens After All-Time Highs

Now let’s look at what actually happens to markets after they hit new highs. This is the critical question.

JPMorgan studied every all-time high in the S&P 500 since 1988 and found:

• One year later: the market was higher roughly 70% of the time, with an average return of about +12%
• Three years later: the market was higher roughly 80% of the time
• Five years later: the market was higher roughly 90% of the time

In other words, buying at an all-time high has historically led to positive returns the vast majority of the time. The returns after buying at all-time highs are actually very similar to the returns after buying on any random day. The “all-time high” label is noise, not signal.

Why? Because today’s all-time high is almost always tomorrow’s bargain. Every single all-time high in the history of the stock market was eventually surpassed by a higher one (for markets that continued to exist and grow).

3. The Cost of Waiting for a Dip That May Never Come

“I’ll wait for a pullback” is one of the most common – and most expensive – phrases in investing.

Here’s the problem: when you decide to wait for a 10% correction before buying, you are making two bets:

1. That a correction will happen reasonably soon
2. That you’ll actually have the courage to buy when it does

Both bets are harder to win than you think.

Bet #1: Will the correction come soon? Markets can stay at or near all-time highs for months or even years before experiencing a meaningful pullback. If you’re sitting in cash waiting for a 10% dip, you’re missing out on all the gains in the meantime. If the market goes up 15% before eventually dipping 10%, the post-dip price is still 5% higher than where it was when you started waiting.

The cost of waiting to invest is real and measurable. Every month you sit in cash earning 3-4% instead of being invested in XEQT earning a long-term average of 8-10%, you’re losing ground.

Bet #2: Will you actually buy the dip? This is the one that really kills people. When markets actually do drop 10-20%, the news is terrifying. Headlines scream about recession, layoffs, and financial crisis. Your instinct isn’t to buy – it’s to run. The very conditions that create the “dip” you were waiting for are the same conditions that make it psychologically impossible to pull the trigger.

I’ve watched this happen to multiple friends and family members. They sat in cash waiting for a dip. The dip came. They panicked and waited for it to go lower. It went lower. They panicked more. Then the market recovered and they were stuck having missed the entire round trip.

4. Why “I’ll Buy After a Correction” Is a Losing Strategy

Let me make this concrete with numbers.

Imagine you have $10,000 to invest today, and XEQT is at an all-time high. You have three options:

The investor who bought at the all-time high comes out ahead in most scenarios. The investor who waited for a dip might get a better entry price, but the time spent in cash costs more than the lower entry saves. And the investor who never invests at all falls dramatically behind.

This isn’t hypothetical hand-waving. A study by Charles Schwab examined every possible “worst timing” scenario – investing on the single worst day of every year for 20 years – and found that even the worst-timing investor significantly outperformed someone who stayed in cash.

5. Time in the Market vs Timing the Market

You’ve heard this phrase a hundred times. Let me put real numbers behind it.

Bank of America analyzed S&P 500 data from 1930 to 2020 and found that if you missed the 10 best trading days in each decade, your total return was dramatically lower:

• Fully invested: $1 grew to roughly $17,715
• Missed the 10 best days per decade: $1 grew to roughly $28 (yes, twenty-eight dollars)

The difference is staggering: $17,715 vs $28. And here’s the kicker – the best days in the market almost always come during or immediately after the worst periods. Six of the ten best days in the past 20 years occurred within two weeks of the ten worst days.

This means that if you sell during a crash (or stay in cash during one), you are almost guaranteed to miss the recovery days that produce the majority of long-term returns. The investors who were fully invested – including those who “unfortunately” bought at all-time highs – captured all of those best days automatically.

6. How Dollar-Cost Averaging Removes the Fear

If the idea of investing a lump sum at an all-time high makes your stomach churn, dollar-cost averaging is your friend.

Instead of investing $10,000 all at once, you split it into equal installments – say, $2,000 per month for five months, or $1,000 per month for ten months. This way, you’re gradually entering the market regardless of what it does.

Here’s why this works psychologically:

• If the market goes up: you’re glad you already have some money invested
• If the market goes down: you’re glad you’re buying the next installment at a lower price
• Either way: you feel okay, because you’re averaging into a range of prices

Research shows that lump sum investing beats DCA about two-thirds of the time because markets tend to go up. But DCA beats “doing nothing because you’re scared,” which is 100% of the time.

If all-time highs make you nervous, set up a recurring buy on Wealthsimple and invest a fixed amount every week or two. Within a few months, all your cash will be deployed, and you’ll barely remember what the price was when you started. The anxiety will be gone, replaced by the quiet satisfaction of watching your portfolio grow.

7. Reframe “All-Time High” as “Everything Is Working”

Here’s a psychological trick that completely changed how I think about this.

When XEQT hits an all-time high, don’t think: “This is dangerous, it’s too expensive.”

Instead, think: “The global economy is growing. Companies are earning more. Innovation is creating value. My investment is doing exactly what it’s supposed to do.”

All-time highs mean the collective effort of millions of workers, entrepreneurs, and companies around the world is producing more value than it did before. That’s not a reason to panic. That’s a reason to celebrate.

Now, does this mean markets will go up every day, every month, or every year? Of course not. Corrections, bear markets, and crashes are normal and inevitable. But they are temporary interruptions in a long-term upward trend, not the end of the story. Every crash in stock market history has eventually been surpassed by new highs.

If you had bought XEQT at its previous all-time high in January 2022, you would have endured an uncomfortable 11% drawdown over that year. But by mid-2023, you were back in the green. By the end of 2024, you were up significantly. The “all-time high” that felt scary at the time turned out to be a perfectly fine entry point.

Recency bias makes the current moment feel uniquely risky. It never is. The present always feels more uncertain than the past, because the past has already resolved itself. In ten years, today’s all-time high will look like a bargain.

8. What to Actually Do Right Now

If you have money to invest and you’re hesitating because XEQT is at or near an all-time high, here’s your decision tree:

Do you need this money within the next 3-5 years?

• Yes: Don’t invest it in XEQT. Use a HISA or GIC. Short-term market fluctuations are a real risk for money you’ll need soon.
• No: Invest it. The all-time high is irrelevant for a 10+ year holding period.

Are you investing a lump sum or regular contributions?

• Lump sum: Invest it all today. Data favors immediate deployment ~66% of the time. If you can’t stomach it, split into 3-6 monthly installments.
• Regular contributions: Set up recurring buys and stop looking at the price. Your future purchases will automatically buy at whatever price the market offers – some high, some low, all averaging out.

Are you feeling anxious about it?

• Yes: Start with a small amount today. $100. $500. Whatever doesn’t trigger anxiety. Then increase over time as you build confidence. The goal is to get some money working for you right away.
• No: Buy the full amount and move on with your life.

The single worst thing you can do is nothing. Cash sitting in a savings account loses purchasing power to inflation every single day. A year from now, you’re far more likely to regret not investing than to regret investing at today’s prices.

The Bottom Line

Every all-time high in stock market history was eventually surpassed by a higher one. Markets trend upward because the global economy grows, companies innovate, and human ingenuity creates value. That’s been true for over a century, through wars, pandemics, recessions, and financial crises.

When XEQT hits a new all-time high, the correct response isn’t fear – it’s gratitude that your investment is doing its job.

Buy today. Buy next week. Set up automated purchases and buy every payday without checking the price. The data is overwhelmingly clear: time in the market beats timing the market, and the “all-time high” that feels scary today will look like a perfectly normal point on a long-term chart that keeps moving up and to the right.

Stop waiting. Start investing. Your future self will thank you.