Is Now a Good Time to Invest in the Stock Market? A 2025 Perspective

The Market Has Changed Since 2022

Hey there, fellow investors! I’ve been thinking a lot about timing the market lately. While many of you might be wondering if 2022 was a good time to invest in stocks, we’re now in late 2025, and boy, have things changed dramatically.

Let’s face it – if you’d invested in the market back in October 2022, you’d be sitting pretty right now. According to CNBC, the S&P has surged by about 90% since mid-October 2022. The Dow’s gain in that time is approximately 61%, and the Nasdaq has skyrocketed roughly 126%!

But the real question is what about NOW? Is late 2025 still a good time to jump in or have you missed the boat?

The Current Market Situation (Late 2025)

The major stock indexes have continued their impressive run in 2025. Through early November 2025

• S&P index is up about 15.1% year-to-date
• The Dow has posted gains of roughly 10.6%
• The Nasdaq is leading with approximately 20.9% gains this year

These jumps follow outsized returns in 2023 and 2024 creating what some experts are calling an extended bull market. But here’s where it gets tricky – many financial advisors are now suggesting it might be time to reassess your portfolio’s risk exposure.

Warning Signs: Is a Correction Coming?

James Armstrong, president of Henry H. Armstrong Associates (ranked #14 on CNBC’s Financial Advisor 100 list for 2025), warns that investors “could have too much in equities and not enough in safe assets.”

I gotta say, this makes sense. After such spectacular gains, some experts view the market as overpriced, meaning they expect a correction at some point. We’ve already seen early signs – AI stock valuations spurred a market decline in early November 2025.

Armstrong didn’t mince words when he said: “I’ve been surprised by how many people are afraid to cut back their equity exposure because they’re afraid of missing out on upward gains, and that’s a dangerous posture.”

Portfolio Rebalancing: Why It Matters Now

Here’s the thing about long bull markets – they can secretly change your investment allocation without you noticing. Let me explain:

Say you built a portfolio with 60% stocks and 40% bonds a few years ago. If you never rebalanced during these years of significant stock market returns, that ratio could now stand at more like 90:10. That’s a much riskier portfolio than you originally intended!

Benjamin Offit, a certified financial planner and senior wealth advisor at Composition Wealth, points out that “rebalancing takes the emotion out of it. It puts the client in a position where they have a systematic approach. That enables them to unemotionally sell high and buy low.”

How to Approach the Market in Late 2025

So what’s an investor to do? Here’s my take based on the expert advice:

1. Assess Your Time Horizon

If you’re in retirement or near it, you don’t have the time to recover from a prolonged down market the way retirement savers in their 20s or 30s do. Armstrong advises: “I wouldn’t let fear of missing out blind me to the possibility of a bear market. I’d want to have some money in a safe place.”

2. Consider the Impact of a Potential Downturn

Armstrong suggests thinking about how a 20% or 30% drop in the value of your portfolio would affect your life or your future. “If it will matter, the time to take action is now while prices are high,” he says. “Take some money off the table and put it in a safe place.”

3. Rebalance Strategically

Many financial advisors recommend rebalancing your portfolio at least once a year, if not more often. “I think a couple times a year or maybe more, look at your risk exposure and review what the goal is for the money,” Armstrong advises.

Remember that selling stocks in taxable accounts means:

• Gains on assets held for one year or less are subject to regular income tax rates
• Profits on assets held longer than a year face lower long-term capital gains tax rates (0%, 15%, or 20% depending on your income)

Is It Still a Good Time to Invest Some Money?

Despite the caution flags, I think there’s still opportunity for careful investors. Here’s why:

1. Dollar-cost averaging remains effective – Investing regular amounts over time helps reduce the impact of market volatility
2. Sector rotation opportunities exist – While tech has driven much of the market gains, other sectors may offer better value
3. Long-term fundamentals still matter – Companies with strong balance sheets and cash flow can weather market corrections
4. Diversification is more important than ever – Beyond just stocks and bonds, consider alternative assets

My Personal Investment Strategy for Late 2025

I’ve actually been adjusting my own portfolio lately. After watching these massive gains, I’ve:

1. Taken some profits from my biggest technology winners
2. Increased my allocation to more defensive sectors
3. Built up a larger cash reserve (about 15% of my portfolio)
4. Added some inflation hedges like I-bonds and certain commodities
5. Reviewed my international exposure, which had become underweighted due to US outperformance

The FOMO Factor: Don’t Let It Cloud Your Judgment

One of the biggest dangers right now is FOMO (Fear Of Missing Out). When your friends are bragging about their AI stock gains, it’s tempting to throw caution to the wind.

Armstrong’s warning is worth repeating: being afraid to cut back equity exposure because you’re afraid of missing additional gains is “a dangerous posture.” This kind of thinking often leads to buying high and selling low – exactly the opposite of successful investing.

Some Practical Steps to Take Now

If you’re concerned about market valuations but still want to participate, consider these steps:

1. Rebalance methodically – Bring your allocation back to your target ranges
2. Take partial profits – You don’t have to sell everything; trimming positions locks in some gains
3. Implement trailing stop losses – These can protect profits while allowing for further upside
4. Consider defensive dividend stocks – Companies with strong cash flow and dividends can provide income and stability
5. Review your emergency fund – Make sure you have adequate savings outside the market

A Look at Market Segments

Let’s break down how different market segments have performed and where opportunities might exist:

Timing vs. Time In The Market

Here’s something I always remind myself: it’s not about timing the market perfectly, but about time IN the market. Even if you’d invested at the peak before the 2008 financial crisis, you’d still be way ahead today if you’d stayed invested.

That said, after such a long bull run, it makes sense to be more cautious than usual. The market doesn’t go up forever, and trees don’t grow to the sky.

Final Thoughts: So Is Now a Good Time to Invest?

If you’re asking me whether late 2025 is a good time to go all-in on stocks, I’d have to say probably not. The risk/reward ratio isn’t as favorable as it was in 2022 or even 2023.

However, if you:

• Have a long time horizon (10+ years)
• Are dollar-cost averaging
• Maintain proper diversification
• Keep your risk exposure aligned with your goals

…then continuing to invest methodically still makes sense.

For those closer to retirement or with shorter time horizons, this might be an excellent opportunity to take some chips off the table while markets are near all-time highs.

Remember what Armstrong said: “The time to take action is now while prices are high.” Sometimes the best investment move is playing defense and protecting what you’ve already gained.

I’d love to hear your thoughts on the current market! Are you rebalancing, holding steady, or making other adjustments? Drop me a comment below with your strategy for navigating these interesting times.

Until next time, happy (and prudent) investing!

Investing $1,000 a month for 30 years could result in a portfolio worth anywhere from approximately $473,000 to over $1.8 million, depending on the rate of return.