The S&P 500 Just Hit All-Time Highs During the Iran War. Here Is What I Am Doing About It.

The S&P 500 just hit another all-time high in the middle of an active war, with oil above US$100, with inflation risks creeping back, with recession talk everywhere. If you are sitting there wondering whether to invest right now or wait for things to calm down, I get it. I have been asking myself the same question. And honestly, I have been here before and I made the wrong call.

I Bought the COVID Dip and Then Stopped

Back in 2020, I did something right. As the STI ETF and VWRA were crashing due to Covid, I started buying. I did not try to catch the exact bottom. I just bought regularly as prices fell. When the market recovered, I was sitting on some decent gains. But that is where I made my mistake. After the recovery, I convinced myself that it had gone up too fast, too soon. Surely there would be another dip. So I stopped my regular investing and waited. The dip I was waiting for did not come until 2022, when the Russia-Ukraine war triggered a market sell down. By then, the index had already risen so much from the COVID lows that I would have been far better off if I had just continued buying regularly throughout the recovery. I had missed out on nearly two years of gains simply by waiting for a better entry that never came on my terms.

 

Fast Forward to the 2026 Iran War

Fast forward to today. I had been building up a war chest, half-expecting the Iran war to finally crush the market and give me my long-awaited entry point. Instead, the S&P 500 kept going up. All-time high after all-time high, even as the Strait of Hormuz remained blockaded and oil prices surged. The market simply refused to cooperate with my plan. And here I am again, having missed out on another leg of gains. In total, I would say this mindset has cost me roughly five years of returns. That is a long time to be on the sidelines waiting for a moment that either did not come or passed too quickly to act on. 

(On a side note, I find it amusing that the conflict in Eastern Europe is called the "Russo-Ukrainian War" on Wikipedia, with both Russia and Ukraine named, while this one in the middle east is simply called the "2026 Iran War" with no mention of the United States. I suppose one of the perks of being the global superpower is getting to decide how history is written.)

Should You Invest When the Market Is at All-Time Highs?

This is probably the question most of us are wrestling with right now. The honest answer, based on historical data, is yes. All-time highs are not a reason to avoid investing. Research has consistently shown that investing at all-time highs produces returns that are comparable to investing at any other time. The reason is simple: markets tend to reach new all-time highs regularly over long periods. Waiting for a pullback often means waiting indefinitely while the market climbs higher. That said, I completely understand the emotional difficulty of buying when prices feel stretched. I feel it too. It is one thing to know this intellectually and another thing to actually click the buy button.

 

The Two-Bucket Strategy I Am Adopting Going Forward

Looking back, I think the smarter approach would have been to split my capital into two buckets from the start, rather than treating it as an all-or-nothing decision. 

Bucket 1: Regular Investing, No Matter What This bucket invests on a fixed schedule every month, regardless of market conditions. Whether the S&P 500 is at an all-time high or in the middle of a sell down, this bucket keeps buying into a broad low-cost index fund like VWRA and/or the STI ETF. No timing, no waiting. Just consistent dollar-cost averaging. This is the bucket I should have never stopped filling after COVID. 

Bucket 2: The War Chest for Real Dislocations This is a smaller portion of capital parked in T-bills, a money market fund or high yield savings account earning some yield while I wait. It only gets deployed during genuine market dislocations, the kind of fear-driven sell downs where prices fall 15 to 20% or more and the panic feels overdone. The important thing is to set the rules for this bucket in advance, when you are calm and not in the middle of a market meltdown.

 
With this structure, Bucket 1 makes sure I never fully miss a rally again. Bucket 2 makes sure I still have something to deploy if a real crash comes. And even if the crash never comes and Bucket 2 just sits there earning T-bill returns, I have still won because Bucket 1 kept compounding the whole time. This is the strategy I am working towards adopting. The hardest part, honestly, is getting past the emotion of buying at or near all-time highs. That is something I am still working on.

 

The Key Takeaway on Market Timing

Trying to time the market feels smart. But more often than not, it just means sitting on the sidelines while the market moves without you. The investors who consistently come out ahead are rarely the ones who timed the bottom perfectly. They are the ones who stayed in the market long enough for compounding to do its work. If you are waiting for the perfect moment to invest, a better entry point, there is a good chance that moment will never feel quite right. Because there is always something to worry about. The question is whether you want to keep waiting, or whether you want to put a system in place that keeps working regardless of what the news says.

 
What are you folks doing in this environment? Are you staying invested, waiting for a pullback, or running something similar to the two-bucket approach? Let me know in the comments below. Happy Value Investing!

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