Every year, and especially in strong markets, I get some version of the same question: “Should I wait to invest until after stocks drop?” Right now, with the S&P/TSX 60 at record highs, plenty of people are thinking about holding cash on the sidelines.

I’m not in the business of timing the market, and history suggests you shouldn’t be either. Record highs are part of healthy markets, not a sign they’re about to collapse. Staying invested and continuing to add to positions, especially in a disciplined way, has almost always beaten waiting for the “perfect” entry point.

Bull vs. bear markets by the numbers

Looking at the past century of North American stock market history, bull markets have been far more frequent and much longer-lived than bear markets. The average bull market has lasted around five to six years with total gains well north of 150%. In contrast, bear markets tend to be shorter, often a year or less, with average declines of around 30%.

That means the bulk of your investing lifetime is likely to be spent in rising markets. If you only wait for corrections before investing, you risk missing long stretches of compounding. Even if a pullback happens after you buy, history shows you’ll likely recover and push higher well before you’d have been able to time your entry perfectly.

Why you don’t time the market

There’s a behavioural finance angle here. Humans are wired to feel the pain of losses more than the pleasure of gains, which leads to hesitation and second-guessing. Even professional investors using complex trend-following models often underperform.

Trying to time highs and lows is also mentally exhausting. Instead of focusing on building wealth, you’re constantly reacting to short-term moves. Worse, if you guess wrong twice, selling too soon and buying back too late, you can permanently reduce your long-term returns.

A simpler approach: Dollar-cost averaging

A far more reliable strategy is dollar-cost averaging into a broad-market exchange-traded fund like iShares S&P/TSX 60 ETF (TSX:XIU). With a management expense ratio of 0.18%, XIU gives you exposure to 60 of Canada’s largest and most stable companies, weighted by market capitalization.

By committing to buy on a set schedule, you automatically purchase more shares when prices are low and fewer when prices are high. This takes the emotional guesswork out of investing and keeps you steadily building your portfolio through all market conditions. Over time, that consistency has historically paid off much more than trying to outsmart the next market move.

The Foolish takeaway

All-time highs aren’t a normal part of long-term investing. The real danger is sitting in cash waiting for the perfect moment that never comes. Keep investing, keep compounding, and let time in the market, not timing the market, do the heavy lifting.