Have you ever noticed that the markets tend to rally at the end of the year? (Some of us like to call this “the Santa Claus rally.”) December rolls around, and suddenly, things start looking up. And it isn’t just because everyone is in the holiday spirit—historically, markets actually perform better this time of year.

Some of this is due to reactive “window dressing” from fund managers who buy the “right stocks” at the last minute before they have to report their final holdings. (Didn’t invest in the top-performing stock of the year? Do it now, or risk looking like you had your head in the sand.) But like many financial trends driven by humans and their behavior, this end-of-year rally doesn’t strictly adhere to rules of logic. In fact, beyond the window-dressing phenomenon, there isn’t much rhyme or reason as to why this end-of-year rally occurs—it’s just a seasonally strong period in the market.

And just as there are seasonally strong periods in the market, there are also seasonally weak periods.

September is one of those periods.

Historically, September and early October are when we’ve seen larger corrections in the market (Black Monday of 1987 being an example). In fact, September is the only month in the history of the stock market with a negative average return.[1]

what does September look like today?

Forecasters’ primary concerns right now are about the market being overvalued. If you look at metrics like price-to-sales, price-to-earnings, the Buffett indicator (which reflects the earnings of the stock market compared to the GDP), you’ll see that the market hasn’t been this expensive since the dot-com bubble of 2000 (and we know what happened after that bubble). In fact, many speculators are comparing AI today to what the internet was then.

Because of that, people are starting to worry. Forecasters are telling investors that there’s a correction on the horizon, so you shouldn’t be buying.

So what should you do?

According to common philosophy, an impending price drop means this isn’t the right time to buy—after all, the name of the game is to buy low, sell high—right?

And what happens if you buy high and the market drops?

Let’s look at the historical data.

This chart from BlackRock shows us that returns are roughly the same (sometimes higher) when investors buy at all-time highs.

Plus, the highs we’re experiencing now may not be as broad-reaching or extreme as you think. While there are pockets of the market that are very rich—many of the Magnificent Seven and several tech giants have expensive valuations—that doesn’t mean the entire stock market is completely over-inflated. In fact, if you look at an equal-weighted index (rather than a market-weighted index), you’ll see that valuations are lofty, yes—but not as extreme as when you look at the top seven to ten names.

So while it may feel counterintuitive, investing at an all-time high in the market (which we’ve been seeing this past month) likely won’t destroy your portfolio. In fact, it might eventually give it a boost.

There are other things playing in the stock market’s favor right now, too:

• Earnings from stocks remain strong, meaning companies are performing well.
• The Fed will likely continue to cut rates for the rest of the year, and lower interest rates tend to support equities.
• We could still possibly have the Santa Claus rally to look forward to, so even if this season becomes weak, it could be a good buying opportunity.

That’s not to say that you should try to time the market (something we always caution against). Instead, it means that even if a correction happens, it’s not likely to throw you off track completely. That is, if your portfolio has time to recoup. This is where we get the adage, “It’s about time in the market, not timing the market.”

Like we’ve said before—your financial plan is a big-picture strategy that’s meant to weather the storms and help you succeed over time. Don’t abandon it because of something you heard on the news or saw on a quarterly report. Play the long game, don’t panic, and always feel free to reach out to us with questions—your future self will thank you.

[1]https://www.ubs.com/global/en/wealthmanagement/insights/chief-investment-office/house-view/daily/2025/latest-02092025.html