Stocks just don’t care about gravity lately. Last Friday, the S&P 500 shattered its previous record from February and closed at a fresh all-time high. The index is now up 5% on the year, a stunning turnaround from being down over 17% in early April. That kind of reversal doesn’t happen often—and it’s got people asking, is it too late to jump in?
Well, here’s the thing: it might actually be the right time. But what you’re buying matters now more than ever.
The Psychology of Buying at Highs
Let’s face it—buying something when it’s expensive feels wrong.
It’s baked into how we operate. Whether it’s Black Friday or a sidewalk sale, most people are wired to hunt for deals. Pay more? Not if we can help it.
But stocks aren’t like your usual shopping list. They’re not jeans or kitchen appliances. Stocks represent real ownership in a company—ownership that can grow and produce value. That’s why “buy low, sell high” can actually lead people astray.
Take Visa, for example. The stock has soared more than 400% over the past decade. Someone waiting for it to “go on sale” might still be waiting.
Visa Shows the Value of Compounding
Visa’s growth is no fluke—it’s been powered by a shift in how people pay.
More people are ditching cash for cards and digital payments. That trend has been going on for years, but it’s not slowing down. And Visa is one of the biggest winners in that transformation.
The company takes a tiny cut every time one of its cards is used. And since it doesn’t take on the actual credit risk—that’s left to the banks—it keeps its margins high. Real high.
Visa’s operating margins hover around 65%, with gross margins above 77%. That’s the kind of profitability tech companies dream of. It’s what gives Visa the muscle to return billions to shareholders through dividends and buybacks.
Here’s how it stacks up:
| Metric | Visa (NYSE: V) |
|---|---|
| Market Cap | $687 Billion |
| Forward P/E | 30.7 |
| 10-Year Median P/E | 33.2 |
| Dividend Yield | 0.65% |
| Gross Margin | 77.10% |
| Price (July 4, 2025) | $358.60 |
| 52-Week Range | $252.70 – $375.51 |
That table says a lot. Visa isn’t cheap, but it’s proven.
But Aren’t Valuations Too High?
Yes, valuations are stretched in many places. No one’s denying that.
A 35x P/E ratio on Visa isn’t screaming “discount.” But it’s not outrageous either, especially when you consider the growth runway left. The forward P/E drops below 31, showing analysts still expect solid earnings growth.
Still, this isn’t April. You won’t find once-in-a-decade markdowns.
That’s why being choosy matters.
If you’re putting money to work right now, think quality.
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Look for companies with wide moats and consistent profitability
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Stick to businesses that don’t need to burn cash to grow
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Pay attention to free cash flow and how management allocates capital
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Avoid names propped up only by hype or hope
Valuations matter. And when they’re rich, the margin for error shrinks.
What to Do When Markets Feel Frothy
Now, this doesn’t mean it’s time to slam the brakes. Far from it.
It just means the game has changed a bit. When stocks are breaking records, investing becomes more about precision than volume. Throwing darts and hoping for the best? Not a great plan.
Take the April pullback. That was the moment to load up on bargains.
Now? It’s the moment to ask: Do I believe in this company five years from now?
That’s how people who bought Apple at $70, or Microsoft at $40, or Visa at $90 made out. They weren’t waiting for a fire sale—they were just buying the best and holding on.
Just because a stock is higher than last week doesn’t mean it’s “too expensive.” Stocks can get more expensive and still be worth it.
The Power of Staying Invested
There’s another risk that doesn’t get talked about enough: doing nothing.
Sitting on cash may feel safer. But over time, it can cost more than any stock market drop. Inflation eats away at it. Opportunities pass by. Compounding doesn’t kick in.
Sure, stocks can fall. But over decades, they rise more often than they fall.
Visa may not double overnight, but it’s a textbook example of a company compounding value steadily. These are the types of businesses that reward long-term holders, not traders looking to time the perfect entry.
Let’s not forget the S&P 500’s own comeback story this year—down 17% in April, now up 5% year to date.
That move caught a lot of people off guard. Those who stayed in? They’re smiling now.
But historically, bull markets last longer than bear markets, and missing the best days—often just a handful of trading sessions—can wreck your overall return.
