Headlines have been screaming about markets hitting record highs for weeks.
This has sparked excitement, but has also triggered a fear of missing out (FOMO), and even anxiety amongst investors.
For long-term investors, however, these all-time highs don’t trigger celebration or panic.
Instead, they stay grounded, asking “Is the business still getting stronger?” and not “Should I sell?”
We examine why experienced long-term investors react differently when the market hits new peaks.
Why All-Time Highs Matter So Much to Short-Term Investors
Markets at all-time highs are exciting times for short-term investors.
These peaks feel like validation of good investments since their returns are measured primarily by share price movements.
Instead of compounding, these traders focus on timing their entries and exits to make gains.
During these highs, they also worry about buying when it is too expensive.
As they enter and exit quickly, short-term investors often lack the flexibility to hold onto shares for long if they enter at elevated prices.
How Long-Term Investors See All-Time Highs Differently
Conversely, to long-term investors, a new high often reflects improved earnings and sturdier business fundamentals.
Strong businesses tend to reach multiple all-time highs over decades as their earnings grow and balance sheets strengthen.
Rather than taking it as a cue to sell, long-term investors evaluate the underlying business during all-time highs.
Instead of price movements, business fundamentals such as earnings resiliency, balance sheet strength, and dividend sustainability are analysed.
A strong balance sheet provides downside protection while dividend growth and sustainability provide tangible returns even when markets are volatile.
Long-term returns are driven by time in the market rather than by timing the market.
Why All-Time Highs Can Be a Non-Event for Income Investors
For income investors, all-time highs are often just “noise” because their primary objective is consistent cash flow, which continues regardless of share price volatility.
While a surging price might excite the market, it doesn’t change the cash hitting an investor’s bank account during payout season.
In fact, many experienced investors in Singapore view these peaks as a testament to the “quality” of their holdings rather than a reason to exit.
A prime example is DBS Group Holdings (SGX: D05), which recently capped off a stellar financial year.
For FY2025, the bank declared a total dividend of S$3.06 per share.
This payout was built on a foundation of S$2.46 in ordinary dividends and supplemented by S$0.60 in capital return dividends (distributed as S$0.15 per quarter).
For a long-term investor, this represents a 38% year-on-year jump in income.
When a company provides this level of capital return, the fact that the share price is also at an all-time high is simply a “bonus” rather than a trigger to sell.
The same logic applies to other stable blue chips like ComfortDelGro (SGX: C52) and Singapore Telecommunications (SGX: Z74), or Singtel.
These companies serve as defensive anchors where the focus remains on yield sustainability.
By tracking payout growth and dividend resilience instead of price milestones, these investors turn market volatility into a passive income stream.
They understand that as long as the business fundamentals remain intact, an all-time high is just a signal that the rest of the market is finally recognizing the value they have been compounding for years.
When All-Time Highs Do Deserve Attention
All-time highs deserve closer attention when prices outpace realistic earnings potential.
One of the metrics to look at is the Price-to-Earnings (P/E) ratio; if valuations are stretched unreasonably, future returns might be constrained even if the business remains solid.
While all-time highs are often a sign of strength, they deserve closer scrutiny when price growth outpaces earnings.
For example, ST Engineering (SGX: S63) reached a historical high of S$10.14 on 9 February 2026.
This push has driven its Price-to-Earnings (P/E) ratio to almost 40, nearly double its long-term historical average.
When a mature blue-chip stock trades at such a significant premium – even higher than growth stocks like iFAST Corporation (SGX: AIY), which currently sits at a P/E of 35.4 – investors should exercise caution and evaluate if the underlying fundamentals justify the record-breaking price.
All-time highs can also lead to portfolio concentration risk, when a powerful player dominates the exposure, and a rebalancing might be needed.
When fundamentals weaken while prices continue to rise, it is a signal to reassess the business’s future potential.
Attention to all-time highs when warranted is about thoughtful analysis and risk management, not reacting to headlines or short-term market noise.
Common Mistakes Investors Make at Market Highs
Markets at all-time highs can trigger costly mistakes.
When conditions feel optimistic, investors respond by either doing too much or nothing at all.
Some investors opt to sell purely because the prices are “too high”.
They worry a correction will wipe out their gains.
Others stop all investing actions, worried that they are buying when it is “too expensive”.
Many also chase momentum without properly researching the business and its balance sheet.
With news warning of peaks and corrections, some investors make the mistake of letting headlines dictate their strategy.
Instead of calmly evaluating business fundamentals and long-term potential, investors react to short-term price movements and their fears, making these avoidable mistakes.
Get Smart: Focusing On Business Fundamentals Will Not Fail You
Long-term investors can treat all-time highs as checkpoints, evaluating business fundamentals such as dividend growth and earnings quality.
Instead of reacting to price movements, stick to a long-term investing plan and focus on businesses that can continue to compound value.
Use strategies like dollar-cost averaging (DCA) to invest regularly instead of lump-sum decisions.
The real reward isn’t hitting new peaks, but owning quality companies long enough for you to reap the rewards of compounding.
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Disclosure: Wenting does not own shares in any of the companies mentioned.
