You may have seen (or heard) the headlines lately “FTSE 100 hits an ALL-TIME HIGH!”
Now cue the dramatic music, scrolling ticker tape, and possibly a newsreader breathlessly announcing the end is nigh.
Except… it isn’t.
Yes, the FTSE 100 has had a strong year so far, delivering double-digit returns, which is great news for you as an investor (and even better after experiencing with the tariff wars in March). But it also means the dreaded phrase “All-Time High” is being thrown around more often than confetti at a wedding.
Now, let’s talk about why that phrase deserves a bit of a side-eye.
Firstly, it’s a bit… dramatic, isn’t it?
“All-Time High” feels a little too American. We Brits tend to understate things. We don’t say “record-breaking stock market surge.” In fact, here in Yorkshire, we’d probably say, “Not bad for a Tuesday.”
Secondly, (and here’s a Behavioural Bias Alert)…Peaks Make People Wobble
There’s a fascinating bit of behavioural psychology at play here. When markets hit new highs, our brains often go into a kind of emotional overdrive.
It’s called “Recency Bias” – where we give more weight to recent events than long-term patterns. And it often triggers thoughts like:
“Should I sell now before it drops?”
“Surely it can’t go any higher?”
“What if I lose the gains I’ve just made?”
I get it. It feels like the right time to act. But feelings aren’t facts. And investing success rarely rewards the impulsive.
Because here’s the key truth:
Markets Aren’t Mountains – They’re More Like Escalators (that sometimes jitter)
I often hear people say things like, “It’s at the top now, so I think I’ll sell and cash in a bit.”
But stock markets don’t hit a summit and then call it a day. They’re not Mount Everest – they’re more like a never-ending escalator that occasionally wobbles or pauses (sometimes dramatically) on the way up.
A new high isn’t a ceiling. It’s often a stepping stone.
Let’s take a look at the data over the last 25 years:
After the dot-com crash in 2000, the FTSE 100 took until 2015 to recover its previous high. Since then, it’s hit 84 new all-time highs – and is up over 33%.
Meanwhile, the US market has hit 315 new highs in the same period, returning close to 200%.
(Source: 7IM/FactSet. Past performance isn’t a guide, but it’s still worth a peek.)
So what should you do?
That’s the magic of it: probably nothing.
Investing is one of the few areas in life where sitting on your hands is often the best strategy. If your goals haven’t changed, and your portfolio is aligned with those goals, then new highs aren’t a reason to panic — they’re a reason to stay calm and carry on.
Think of them as milestones, not stop signs.
Final Word
We know that markets moving sharply — in either direction — can stir up emotions. That’s why we’re here: not just to help you build a great portfolio, but to help you stay invested in it when the headlines (or your own gut) start shouting.
So next time you hear “ALL-TIME HIGH”, feel free to roll your eyes and mutter, “Jolly good,” into your cup of tea. You’re not climbing a peak — you’re riding an escalator that, with patience, usually goes up.
If you want to chat about your investments or anything else financial, we’re always here.
Warm regards,
Brian
