How to navigate record high markets

In an instant:

  • It’s easier to invest now than ever before.
  • Equity markets are reaching all-time highs, attracting new investors every day.
  • Vanguard’s investment policies can help you make educated investment decisions that are consistent with your goals.

This past year has brought new interest in various activities. For some it was baking sour bread. For others, it was investing in the equity market. Investors opened more than 10 million new brokerage accounts in 2020 (10 million!) – more than in any other year. Some of the factors that led to this investment growth were developed in a previous world:

  • Many brokerage firms have reduced or eliminated commission fees for trading.
  • The learning of investing in social media channels like Tiktok, YouTube and Instagram has become more widespread which has reached a wider and more digital audience.
  • The mobile application has come a long way with the combination of updated platforms and more accessible user interfaces.

The epidemic also affected change: a long time alone, a lot of time to think, and a mixture of curiosity and boredom led many people to start their own investments – to put it bluntly – there was nothing else to do. Declining stock markets in 2020 have made it cheaper to buy stocks and some people have received extra cash (hello, stimulus checks!). All of this created a perfect storm for investors. They have accused the world of investment of having a do-it-yourself, empowered mentality.

What’s more, like every other day, the stock market is closing at record highs. It’s online. No matter where we are. The prospect of a recovery economy, low market volatility, and rising household spending have led to a market boom, and many new investors are wondering how much they should invest (or if they should continue to invest at all).

It may seem to some of you that history is repeating itself – investing in wax and decay as well as interest in the market and fluctuating in the market year after year. But our policies are time-tested to help investors build and maintain portfolios in all market conditions in the long run. At Vanguard, we are always encouraged to welcome new investors – today is the second best time to start investing – and encourage our shareholders to make decisions based on sound, time-tested investment principles: goals, balance, cost and discipline.

  • Create clear, appropriate goals. Every investor has to be intentional with their investment decisions. Creating measurable goals within a realistic reach means you are already preparing yourself for long-term success. And when it comes to investing in a hot market, ask yourself: “Is this decision consistent with my current and future goals?”
  • Keep the balance. Even if you can’t predict what the market will do in the future To be able to Offset risk with a diversified portfolio. Your asset allocation should both be consistent with your goals and strike a balance between risk and reward. Simply put, your portfolio holdings will reflect your comfort level with risk while giving you a chance to return.
  • Try to reduce costs as much as possible. Try to stay with the investment at a low cost so that you can keep a large portion of your return. Indexed investments যেমন such as mutual funds হতে may be a simple, low-cost choice. Remember: When it comes to investing, don’t assume that the more you invest, the more you get.
  • Practice orderly decision making. Investments can be emotional and it is difficult not to react to severe market growth and decline. However, being committed to your diversified portfolio and goals will help you stay on track. Trying to outperform the market rarely works – and can be costly for your portfolio. When market volatility hits, stay true to your vision and invest for long-term success.

Whether you are new or an experienced professional to navigate the market, our investment policies can help you make smart, empowered financial decisions. Learn more about choosing an asset allocation that will balance risk and return while meeting your goals.

* Susan Tompore, 2021. Why did new investors buy the stock during the COVID-19 epidemic


All investments are at risk, including the potential loss of money you invest. Be aware that fluctuations in financial markets and other factors can reduce the value of your account. There is no guarantee that any specific asset allocation or combination of funds will meet your investment objectives or give you a certain income level.

Diversity does not guarantee gain or protect from loss.

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