This post was originally shared in my DT Email Newsletter here.
About two years ago, we had our annual Diligence Wealth Club meetup. One of my members who just got started investing, walked up to me and said: “Willie, the stock market is already so high, how to buy?”
Today, stock markets have continued to trade close to its all-time highs. And I don’t disagree with her. Her fears are the “right fear” I have too.
For instance, the S&P 500 is trading close to its all-time peak. Shares of the Magnificent Seven’s market value – Meta Platforms, Amazon, Microsoft and so on – have run up so much.
In fact, both Apple and Nvidia crossed the US$4 trillion mark in 2025. Chip manufacturing giant, Taiwan Semiconductor also hit the trillion-dollar club last year.
She asked: “So when’s the best time to enter them?”
I told her she’s not alone, worrying about stock market highs. And you might be thinking the same if you’re investing, especially in the US stock market today.
So, what to do then?
Well, the first thing I would do is forget about the idea of picking good businesses.
Instead, I’ll allow myself to overcome our objections. I’ll explain.
1. You must play good defence.
Before putting your money to work, the first question I always ask myself: how much money am I willing to lose?
Most people think about how much money they can make, or how much they have missed out for not buying that compounder.
You can’t control any of these. But you have control over how much you’re willing to lose.
For instance, knowing exactly when to sell off a stock position when a business is falling apart. The good thing about investing is, you don’t need to get hit winners 100% of the time.
The late John Templeton said he’s right about his stock picks 60% of the time. Yet he has one of the best track records in the investment business.
Even for me, I made mistakes too when I invested, DT readers will know. But what’s important here is having good defence, just as crucial as offense (picking winners).
In other words, we must be willing to take losses. This allows us to cut out the losers and focus on the winners objectively in this bull market.
Forget about the idea of picking good businesses first.
Instead, think about how much you’re willing to lose.
2. You’ll always find “excuses” not to invest.
And the hard part is overcoming these excuses. The thing is, there’s always a reason not to invest – you’ll come up with 101 excuses just to sit on the sidelines…
Should I buy it now?
The market is too high, I better wait for it to come down first
The market is too low, I’ll wait for it to recover first
You can always come up with an excuse to not put your money to work. Sure, no one will blame you for not investing.
Meanwhile, you won’t make any money at all. Put it this way, it’s harder to reach your financial goals of becoming a good investor if we keep finding “excuses” not to get into the boxing ring.
Getting started investing is probably still the best “bang for your buck” asset class compared to putting money in the bank.
3. Be willing to look across different countries and sectors
Diversification. You’ll find as much value across many markets.
Since 2010, I’ve invested in the US, China and Singapore stock market — whether it’s Singapore REITs, banks, US technology and global consumers. This is because sectors across countries behave differently during different periods.
At one point, no one really wanted to invest in high growth tech giants after the dotcom crash or after the global financial crisis.
Just like a chess player who adapts to different opening styles and game strategies. If you stick to one market all the time, you aren’t going to grow as an investor, much less your wealth.
Now, to invest at new stock market highs… We’ve to learn to overcome our objections.
This means:
- Play good defence
- Accept that we’ll find excuses for not starting to invest
- Be willing to look across different countries and sectors
If you want to get started investing, check out my Your Lazy Man’s Guide to Dividend Investing 2.0 here.
