More Proof That You Shouldn't Fight the Trend

"Buy low, sell high." Even the most casual investors know this investment adage.

The problem is that buy low, sell high is a lie.

Sure, it sounds good. But it's a foolish goal... And it leads most folks down a path of poor returns.

The real way to invest isn't buy low, sell high. It's buy high, sell higher.

That simply means you only buy when prices are rising. That's because assets that are rising tend to keep rising. So you want to buy in an uptrend... then sell after an asset has rallied to higher prices.

That's why you shouldn't worry just because stocks are hitting new all-time highs. In fact, it should make you excited.

That's especially true today...

The S&P 500 Index is doing something rare. And it tells us the recent rally can continue...

New Highs Tell Us the Boom Isn't Over

We've had nothing but smooth sailing since stocks bottomed in April. Prices have recovered all of the tariff-induced losses... and then some.

We've been hitting new all-time highs for months. And stocks closed higher in each of the past five months.

Closing higher for five straight months isn't that rare. It has happened more than a hundred times since our data begins in 1928.

But it is rare for that to happen while stocks are also hitting new all-time highs. Since 1928, we've only seen 24 unique instances of this setup. And that's what's happening right now...

The casual investor might assume this is bad news. Multiple months of rising prices... plus new all-time highs... It sounds like we missed the rally. It sounds like the market is ready for a pullback.

I understand the fear. But we know better. We know the trend is up. And that's why prices tend to keep rising in situations like this.

History agrees. Here's what happened after these similar setups over nearly a century of data...

Stocks rose 6.2% per year (excluding dividends) since 1928. That's a healthy return. But you can do much better if you buy during this powerful uptrend.

Similar setups led to 5.8% gains in six months and 9.7% gains over a year. That's nearly double the annual buy-and-hold return. And stocks were higher a year later 86% of the time.

This setup will surprise many investors. But the data is clear...

You shouldn't focus on buying low and selling high. Instead, buy high and sell higher.

Stock prices are high right now. But the trend is up. That means we'll have a chance to sell higher in the future.

And that's why we want to stay invested right now.

Good investing,

Brett Eversole