The market is at a record high and the professionals are doing that thing they always do at record highs, which is split into two camps and argue. MSN rounded up both sides recently, and I'd encourage you to read it, because the exercise itself is useful even if neither camp convinces you.

The bear case, condensed: valuations are stretched, the Shiller CAPE ratio is sitting at levels that have historically preceded weak ten-year returns, and buying at all-time highs feels like paying full price for something that might go on sale next month. The bull case, also condensed: earnings are still growing, markets spend a surprising amount of their time at all-time highs, and waiting for a pullback has cost far more money than it has ever saved.

I've written about the CAPE ratio before, and I'll repeat my position: it's a legitimate warning light, but it's a terrible timing tool. It was flashing the same warning in 2016, and 2019, and 2021, and anyone who went to cash then missed gains they still haven't recovered emotionally, let alone financially.

Now some math, because the bear case deserves a fair hearing before I wave it off.

Say the market averages 4% real returns over the next decade because valuations are high, versus the long-run average of about 7%. You invest $500 a month. At 7%, after ten years you'd have roughly $86,000. At 4%, roughly $73,500. That's a real difference, no question. But the part people miss is that staying in cash earns you roughly $60,000 of purchasing power eaten hollow by inflation. The "bad" outcome beat the sidelines by $13,500. The expensive market still won.

The question was never whether stocks are pricey today, but whether the alternative is better. It almost never is, for money you don't need for a decade or more.

There's a psychological trick your mind plays at all-time highs, and I want to name it. When the market is down 30%, buying feels reckless. When it's at a record, buying feels like chasing. There is no price at which buying feels comfortable. I've been investing for forty years and I can report that the discomfort never fully goes away, you just learn to act despite it.

A few practical thoughts, and then I'll leave you alone. If the record high makes you nervous, that nervousness is information about your asset allocation, not about the market. Maybe you're carrying more stock exposure than you can actually stomach, and a rebalance toward bonds or cash you'll need within five years is the honest fix. What it isn't is a signal to time anything.

And if you're dollar-cost averaging, which most of you are if you're contributing to a 401(k) every payday, you're already doing the right thing. You're buying more shares when prices dip and fewer when they're high, automatically, without needing an opinion about CAPE ratios at all.

My favorite statistic, and I apologize to long-time readers who've heard it before: the S&P 500 has closed at an all-time high on thousands of separate occasions over the decades. Records aren't a top. They're just Tuesdays.

So read the bull and bear cases, understand both, and then go do what you were already doing. I don't say that to dismiss the debate; I say it because ignoring the debate is usually the conclusion the debate earns.

The usual disclaimer: I'm a guy who's been investing a long time, not a financial advisor. Your situation is your own.