Why selling at all time highs is usually a bad idea (10 12 25)

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Thinking of selling because the market’s at an all-time high? You’re not alone — but history says that’s usually a losing move. Today, we’ll cover why “getting out” at the top often backfires, and what to do instead.

Here’s what we’re covering in today’s Clark Smart Investing newsletter:

• Why selling at market highs is usually a bad idea.

• 7 ways to invest in real estate.

• The surprising reason Clark really likes Robinhood Gold.

• Should you try to invest in AI?

• Q&A: How do RMDs factor into the 4% rule?

• Smart money move of the week: #1 way to protect yourself from identity thieves.

💵 Why Selling at All Time Highs Is Usually a Bad Idea

The numbers are staggering. The S&P 500 has set 28 new closing highs in 2025 so far, and many investors are feeling that familiar itch. After watching their portfolios soar to record levels, a voice in their head whispers: “This can’t keep going. What goes up must come down. It’s time to get out.”

If you’ve felt this way recently, you’re experiencing what psychologists call “peak aversion” — the deeply human belief that extraordinary success must be followed by extraordinary failure. It feels prudent, even contrarian. You’ll look like a genius when the inevitable crash comes.

But here’s the problem: before you even click “sell,” you need to answer the most important question that most market timers never consider: At what point will you get back in?

This article explores the psychology behind that impulse, real examples of how market timers get trapped, and smarter ways to manage risk without missing future gains.

📚️ Recommended Reading

✅ Poll: What’s Your Take?

Every week, we'll ask a new question to get your take on the latest financial trends and topics.

Last Week’s Poll Results

We asked: “Will you have a pension in retirement?” Here’s how you answered:

• Yes: 62%

• No: 38%

💬 Ask an Advisor

In this recurring Q&A, we share questions that have been answered by Clark Howard or Wes Moss on the podcast. Submit your question today!

David in Oregon: When applying the 4% withdrawal rule in retirement, how should Required Minimum Distributions (RMDs) factor into the equation?

Wes Moss says: When it comes to figuring out your retirement withdrawal rate, I still like the 4% rule as a simple, reliable starting point. But here’s an important nuance: your Required Minimum Distributions (RMDs) only count toward that 4% if you actually spend the money. If you just move your RMD from an IRA to a brokerage account and reinvest it, that doesn’t count as a withdrawal under the rule. Interestingly, the creator of the 4% rule, William Bengen, recently updated his research. He’s now suggesting a withdrawal rate closer to 4.7%, thanks to more diversified portfolios that include mid-cap, small-cap, and international stocks. I still like to think of it as the “4% plus rule.” Start at 4%, and if your portfolio performs well or you’re underspending, you can always treat yourself to an extra trip or two down the road.

💸 Money Tip of the Week

☎️ Need Money Help?

The Team Clark Consumer Action Center is a free helpline that can help you navigate your money questions. Call 636-492-5275. Visit clark.com/cac for more information.

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