Should You Invest When Markets Are At Record Highs?

SAXO

Economic

Forex

Stocks

Summary:

Markets continue to print record highs, and with them, investor uncertainty.Some worry that valuations have run too far. Others fear missing out on the next leg higher. And somewhere in between are those asking, “Should I wait for a correction before putting money to work?”It’s a fair question, but history suggests it’s the wrong one.

Key points:

● Market highs often create hesitation for investors on the sidelines, but history shows that long-term investing at these levels can still deliver strong returns.

● With tools like limit orders, thematic diversification, and dollar cost averaging, there are still smart ways to put money to work—even at elevated levels.

● Instead of trying to time the top, focus on building a resilient, well-diversified portfolio that can navigate different economic scenarios.

● Long-term success comes from consistency and discipline, not perfect timing.

The myth of waiting for the perfect entryIn theory, “buy low, sell high” sounds perfect. In practice, most investors struggle to do either.In fact, if you only invested on days when the S&P 500 hit an all-time high, your long-term returns would often be higher than if you invested on any random day.

Source: Bloomberg, Barclays Private Bank, March 2024

That’s because record highs typically happen during bull markets, and bull markets tend to last longer than expected.The real challenge isn’t timing the market. It’s having a strategy that works when prices feel high, and sticking to it.

What to do instead: smart moves at market highs

1. Make pullbacks work for you

Even when the overall market is rising, individual stocks and sectors often face short-term dips. Those can be opportunities.

What you can do:

● If you’ve got cash on the sidelines, set price alerts for stocks or ETFs you want to own at better value.

● Use limit orders to automate discipline. These let you set a specific price you're willing to pay, and the order only executes if the market reaches that level. This helps avoid buying in a rush or at inflated prices.

● Keep a watchlist of high-conviction investments and gradually add to them during short-term weakness.

● Consider selling a put option(if you're familiar with options), which can let you earn income while waiting to buy at a lower price.

2. Look for what hasn’t rallied yet

While technology and AI stocks have led the charge, many parts of the market have lagged, and may offer better value and catch-up potential if the rally broadens out.

What to consider:

● Small-cap stocks and value-oriented sectors (like banks, energy, or healthcare) have underperformed and may benefit from stronger economic growth or a shift in investor focus.

● Dividend stocks can provide a steady income stream and may become more appealing if interest rates begin to fall.

● Rather than trying to pick individual stocks, consider broad-based ETFs that offer exposure to these less-loved areas of the market, helping you diversify while keeping costs low.

3. Diversify based on what drives markets

Market leadership today is shaped less by geography or sector, and more by macro forces like interest rates, trade policies, and geopolitical risk. Traditional diversification alone may not be enough. It’s time to think about how different parts of your portfolio respond to shifting policy and economic drivers.

How to position:

● Tariff-sensitive sectors like autos and semiconductors may benefit if global trade tensions ease, but could struggle in a more protectionist environment. On the other hand, utilities, healthcare, and defense tend to be more insulated from global supply chains and policy swings.

● Utilities and real estate often perform well when interest rates fall, as their steady income becomes more attractive relative to bonds and cash.

● Defense stocks, commodities, and gold can help cushion your portfolio during periods of geopolitical uncertainty or broad market volatility.

● Consider thematic funds that align with long-term structural trends such as clean energy, digital infrastructure, and healthcare innovation. These can offer growth potential across different macro cycles.

Even if some of these areas have gained attention recently, their relevance over the long term means they may still be underrepresented in many portfolios.

4. Stay consistent with a plan

Waiting for the “perfect moment” to invest often leads to missed opportunities. Even when markets dip, fear and uncertainty can prevent action, leaving cash on the sidelines and long-term goals unmet.

What works better:

● Adopt adollar-cost averaging (DCA) approach – invest a fixed amount at regular intervals (monthly or quarterly), regardless of market levels. This helps reduce the impact of short-term volatility and takes the emotion out of decision-making.

● Set calendar reminders to review and top up your investments, just like you would with other recurring commitments like bill payments or insurance.

● Stay focused on your long-term goals, not the day-to-day headlines. Markets will fluctuate, but a consistent, disciplined approach tends to win over time.

Final thought

Buying at market highs can feel uncomfortable, but history shows that long-term investors are often rewarded for staying the course.If you diversify smartly, lean into underappreciated areas, and stay consistent with your investing plan, you won’t need to worry about whether you’re “too late.”Because long-term wealth isn’t built by picking the perfect moment.It’s built by showing up, again and again.

Source: SAXO

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Gerik

Economic

Central Bank Caution Reflects Economic Stability

Goldman Sachs and J.P. Morgan have recalibrated their outlooks on ECB monetary policy, signaling a more cautious stance after Thursday’s decision to maintain the main refinancing rate at 2%. The ECB has already implemented eight rate cuts since June 2024, yet the central bank now appears inclined to pause its easing cycle amid improving macroeconomic conditions. Christine Lagarde, the ECB President, emphasized a “wait-and-watch” approach, describing the current state of the economy as being in a “good place.”

Goldman Sachs no longer anticipates any additional rate cuts in 2025. Meanwhile, J.P. Morgan has delayed its predicted rate move to October, instead of the earlier forecast of September. This change reflects confidence that the eurozone economy has shown greater resilience than expected, reducing the urgency for further monetary easing.

Trade Tensions and Diplomacy Shape Rate Outlook

Another key variable influencing the ECB's path is the ongoing negotiation of a trade agreement between the European Union and the United States. Earlier threats from U.S. President Donald Trump to impose 30% tariffs on EU goods by August 1 had heightened fears of trade-driven stagflation. However, diplomats now signal that a more moderate agreement centering on a 15% across-the-board tariff is emerging as the most probable outcome.

This potential resolution has been factored into Goldman and J.P. Morgan’s updated forecasts. Analysts see a deal as removing one of the largest downside risks to European growth. If finalized, it would also reduce the need for the ECB to respond preemptively to external shocks with additional rate cuts.

A Divided Wall Street and Uncertain Markets

In contrast, other major institutions like Bank of America, Barclays, Citigroup, Deutsche Bank, and Morgan Stanley are holding onto their expectations for a September rate cut. However, even among these firms, caution is growing. Morgan Stanley analysts noted that stronger economic data or further easing of trade tensions could delay the next rate cut until December or beyond.

Market sentiment reflects this divide. Eurozone money markets currently assign only a 30% probability to a rate cut by December. This hesitancy underscores how sensitive ECB projections now are to incoming economic data, especially inflation trends, labor market resilience, and manufacturing output.

Markets Eye Data and Diplomacy

The ECB's path forward has become increasingly data-dependent, shaped not only by inflation metrics and growth indicators but also by geopolitical developments like the pending EU-U.S. trade agreement. For now, monetary policy remains in a holding pattern, with financial institutions and traders cautiously rebalancing expectations.

Unless the eurozone’s economic outlook deteriorates or diplomatic tensions escalate further, the ECB is likely to extend its pause. The next decisive shift may come only if incoming data clearly signal weakening demand or if negotiations with the U.S. collapse, reigniting trade risks.

Source: Reuters

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Michelle

Economic

Forex

German business sentiment is still riding the wave of optimism. Even though we still see a large portion of wishful thinking, the seventh consecutive increase in Germany’s most prominent leading indicator remains remarkable. In July, the Ifo index came in at 88.6, slightly up from 88.4 in June, and stands now at its highest level since last summer. While expectations remained unchanged, the current assessment component finally improved, suggesting that growth in the third quarter could pick up again.

Wave of optimism

A wave of optimism seems to have caught the German economy, but it remains unclear whether it is really based on stronger fundamentals or just wishful thinking. It's probably a combination of both. And to be more precise, the wave of optimism has caught corporate life, not households. While the Ifo index looks almost unstoppable, consumer confidence has fallen for two months in a row and remains weak.

Returning to German businesses, there are several reasons for increasing optimism; after two years of inventory build-up and dropping orders, the inventory cycle started to turn for the better at the start of this year. Energy prices have come down from highly elevated levels, and the prospect of fiscal stimulus has played a role, too. In fact, German businesses seem to be focusing on the bright side of what could happen under the new German government, rather than fearing the downsides from ongoing uncertainty and trade tensions. And at least the optics of the new government are good. German businesses had grown disillusioned with the last government’s ongoing internal controversies. Now, the sheer fact that the new government has avoided big blunders like open controversies or erratic policy announcements and has begun to really implement the announced fiscal stimulus has boosted its popularity.

The latest episode in the government’s confidence-building was this week’s summit between the government and business leaders. An initiative of large German corporates, self-named ‘Made for Germany’, promised to invest €631bn over the next three years. While the headline figure looks impressive, only €100bn of that sum will actually be ‘new’ investments. The rest is previously planned investments. €100bn over three years equals some 0.7% GDP per year. Whether these investments will really reach the economy and how much crowding out of other investments will emerge remains to be seen, as does the question of whether these investments will materially boost innovation or new technologies.

What a difference half a year can make

In any case, just take a step back and remember where the German economy stood at the start of the year: completely in the doldrums with two years of recession, a huge investment gap and an economic business model that was up for a complete overhaul. Seven months later, there is a €500bn infrastructure fiscal stimulus, a ‘whatever it takes’ spending promise for defence, small tax incentives for private investments and a commitment by large corporates to step up investments. What a change!

Admittedly, there are still few signs of an overhaul of the country’s economic model, either in the government’s coalition agreement or in this week’s announcements by the ‘Made for Germany’ initiative. This increases the risk that all investments will lead to higher productivity. However, Germany had the deep fiscal pockets to avoid the policies it prescribed to many other eurozone countries during the euro crisis: structural reforms and austerity. Still, even with the deep pockets, Germany will have to address the weakness of its economic business model quickly. Investments can only be a first step and not the only step.

To be clear, the near-term outlook for the German economy will still be highly affected by the ongoing trade tensions, possible US tariffs and the stronger euro. It remains remarkable that German businesses seem to almost completely ignore these risks. This return of optimism could also get a cold shower next week when the first estimate of second-quarter GDP growth is released. Nevertheless, the longer-term outlook continues to improve. The jury is still out on whether money will be able to buy growth, but today's Ifo index once again shows that it can at least buy optimism.

Source: ING

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Gerik

Economic

A Fragile Alliance Fractures

Ambrose Evans-Pritchard argues that Donald Trump’s escalating trade war with Europe centered on 15% tariffs and punitive duties on key sectors like steel, aluminum, and pharmaceuticals has dominated headlines but diverted attention from a deeper and more existential threat: China. European leaders, still reeling from Trump’s protectionist posture, have failed to appreciate that Xi Jinping has decisively ended any notion of a collaborative front with the EU against U.S. trade aggression.

While European leaders like Antonio Costa and Ursula von der Leyen attempt to preserve diplomatic facades, relations with China have reached a post-Cold War low. China’s latest export onslaught, built upon suppressed wages and a heavily manipulated exchange rate, resembles not strategic competitiveness but systemic dumping threatening Europe’s industrial heartland.

The China Shock 2.0: A Slow Economic Strangulation

The new wave of Chinese economic coercion termed “China Shock 2.0” is proving more severe than its predecessor from the early 2000s. Back then, Chinese goods spurred global deflation and income inequality; now, as China faces its own post-bubble slump, it offloads vast excess capacity abroad, intensifying its trade surplus with the EU, which soared to €305 billion in 2024 and is still rising.

This surge is underpinned by a 30% depreciation in China’s real effective exchange rate against the euro since 2022, facilitated through veiled interventions and state-led currency suppression. Such policies amplify the competitiveness of Chinese exports artificially, leaving European industries unable to respond through normal market mechanisms.

Oxford’s George Magnus warns that this time, the threat is existential. Europe’s core industrial capacity automotive, technology, machinery is at risk. German economic interests, long accused of aligning too closely with China, are now confronting the fallout of their Faustian bargain.

Trump’s Distraction, Xi’s Opportunity

Amid this crisis, Donald Trump’s policies exacerbate Europe’s vulnerability. While the EU grapples with calibrated tariffs on Chinese electric vehicles and rare-earth dependence, it simultaneously contends with Trump’s trade deal demands, digital tax disputes, and steel conditionalities. Trump’s unpredictability forces European leaders to divert resources and attention from China to manage their transatlantic relationship.

Strategically, this creates the worst-case scenario: a Europe distracted, divided, and dependent facing economic offensives from both allies and adversaries. Trump’s refusal to treat the West as a unified bloc, and his transactional approach to diplomacy, inadvertently serves China’s long-term goals.

As Charles Parton from the Mercator Institute notes, the CCP views global politics as an ideological struggle. China’s leadership is not merely trying to out-compete the West it is committed to undermining democratic values and pluralism. In this context, Trump becomes, in Evans-Pritchard’s words, “Xi Jinping’s useful idiot” his tariff crusade splinters Western solidarity at a time when unity is essential.

Europe’s Dilemma: Industrial Decline or Strategic Awakening?

The EU’s attempts to “de-risk” from China through mild tariffs and symbolic diversification have thus far been ineffective. As Beijing weaponizes its grip on rare earths and uses global supply chains to retaliate against any pushback, Europe is discovering the true cost of its economic dependencies.

Markets may remain optimistic about a European economic rebound, fueled by military-Keynesian spending and NATO defense budgets. Yet unless Europe fundamentally rethinks its trade exposure and industrial policy, that optimism may give way to disappointment. The EU faces the very real prospect of a second “lost decade” a period of economic stagnation, technological erosion, and geopolitical irrelevance.

Evans-Pritchard’s final indictment is clear: China poses a civilizational challenge, not just a commercial one. And in failing to recognize this distracted by Trump’s drama and seduced by past illusions of global integration Europe risks losing more than economic strength. It risks its strategic autonomy. In this battle, tactical diplomacy will not suffice. Only bold, unified, and forward-looking economic strategy can secure Europe’s future.

Source: The Telegraph

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Gerik

Economic

Trade Diplomacy Amid Golf and Ceremony

President Trump’s visit to Scotland, where he is scheduled to tour his golf resorts in Turnberry and Aberdeen, also doubles as a venue for delicate trade negotiations with the U.K. The informal talks with Prime Minister Starmer are expected to address lingering elements of the new U.S.-U.K. trade framework, which provisionally took effect on June 30.

While the current deal outlines a 10% baseline tariff on British exports to the U.S., it includes exemptions and quotas for sectors like autos and aerospace. However, some key elements remain provisional. Chief among these is the removal of the 25% tariff on U.K. steel and aluminum, which Washington has tied to ensuring that imported British steel is “melted and poured” domestically a condition aimed at preventing indirect imports of Chinese-origin materials.

Digital Services Tax: A Sticking Point

Another unresolved issue is the U.K.’s digital services tax, which applies to revenue generated by large tech firms operating in the country regardless of their physical location. Washington has long criticized this levy, arguing it disproportionately targets American tech giants. The Trump administration views the tax’s repeal as a condition for further tariff relief and has linked it to ongoing trade negotiations.

According to White House Press Secretary Karoline Leavitt, the leaders will meet “to refine” the current deal and potentially advance these stalled provisions. Though the terms are far from finalized, the meeting may yield headline announcements that symbolize progress, even if the substantive gains are modest.

A Pragmatic Partnership

Despite their ideological differences Trump being a Republican and Starmer leading a center-left government both leaders appear to share a pragmatic rapport. At the recent G7 summit in Canada, their friendly demeanor drew attention, especially when Trump assured reporters that the U.K. was "very well protected" from further tariffs “because I like them.”

This tone of personal diplomacy, coupled with the urgency created by the August 1 trade deadline, gives analysts reason to believe that incremental concessions may be reached. Kallum Pickering, chief economist at Peel Hunt, noted that a compromise could involve the U.S. relaxing tariffs in exchange for U.K. movement on the digital tax a classic “give and take” scenario.

Strategic Implications and the Road Ahead

In the broader context of global trade friction and protectionism, the U.S.-U.K. pact though not widely celebrated for its scope offers stability and mutual benefit. The U.K., having already secured a promising deal with India, is eager to demonstrate its global trade agility post-Brexit. Trump, on the other hand, is keen to showcase his ability to protect American interests while maintaining alliances with key partners.

Following this Scotland visit, the momentum may carry into Trump’s upcoming state visit to the U.K. in mid-September, where further discussions with the monarchy and policymakers are planned. Until then, eyes remain on whether this week’s informal golf-course diplomacy can settle the outstanding issues particularly in steel, aluminum, and digital taxation before the looming August trade adjustment deadline.

Source: CNBC

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Winkelmann

Cryptocurrency

Forex

The options expiry on Deribit may add to the price pressure for BTC. The leading coin traded at $115,549.15, pressured closer to the level of maximum pain at $112,000.

Deribit announced a total of $15.45B in options, down from June’s $17B. The monthly event is still considered significant, as the crypto market has not experienced a summer slump.

The BTC options expiring have a notional value of $12.66B, while ETH expects a $2.75B expiry event.

Monthly BTC And ETH Options Are Expiring Today_1

While ETH maximum pain price at $2,800 is less probable, BTC may see last-minute pressure. For the past few months, both BTC and ETH have expired above their options maximum pain price.The put/call ratio signals a more moderate stance, though still retaining a bullish trend. Deribit has seen a faster accumulation of open interest, already building up over $37B for the quarter to date. At the end of Q2, the open interest at expiry was just $35B.

BTC still trades in greed territory, with an index of 67. However, this does not preclude short-term price moves. Overall BTC volatility is near an all-time low, though the price still fluctuates between key levels. The BTC volatility index is down to 1.27%, with a brief spike during the July rally.

BTC expects dip on extended long liquidations

BTC may easily dip to the $114,000 range, where an accumulation of short positions may trigger an attack. Despite this, BTC retains its bullish factors, with a new accumulation of short positions all the way to $119,000.Despite the complex trading, the end of the month has historically performed as a good entry point. BTC still expects a breakout to a new price range, despite temporary setbacks.

ETH retains the $3,600 range, though the token saw the largest share of long liquidations in the past 24 hours. ETH is traded with more exuberance, with signs of being overheated. The market dominance of ETH expanded to 11.4% as more traders switched their attention, while BTC dominance sank to 59.6%.

BTC and ETH had a drawdown mostly driven by long liquidations, ahead of the monthly options expiry. | Source: CoingGlass.

In the past 24 hours, ETH was a leader of liquidations, with $152.13M in predominantly long positions. BTC saw $152.04M in long positions liquidated.

BTC falls on signs of whale selling

BTC also faces added pressure from spot selling. Despite the general accumulation trend, in the short term some whales are sending their coins to exchanges.Galaxy Digital, one of the intermediaries for both retail and institutional traders, has sent 11,910 BTC to multiple exchanges.

Monthly BTC And ETH Options Are Expiring Today_3

The crypto service provider also kept sending a few hundred BTC to Bybit and Bitstamp.

The spot sales originating from the Galaxy Digital wallet follows a recent reawakening of a wallet from 2011. The wallet moved 3,962 BTC, after making a test transaction. The old whale wallet received the typical messages of proving coin ownership, which have made other whales move their coins to new addresses and split them to avoid easy tracking.

Source: CryptoSlate

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Gerik

Economic

A Transformative Trade Accord

The U.K.–India Free Trade Agreement marks the most significant bilateral trade deal for the U.K. since Brexit and India’s first FTA with a developed economy outside Asia. Signed on July 24, 2025, the agreement is the result of three years of negotiation, culminating in tariff reductions across key sectors such as textiles, automobiles, alcohol, and agricultural products. British exports to India will face an average tariff of just 3%, down from 15%, while 99% of Indian exports to the U.K. will now be tariff-free.

Economists from ANZ and Citi Bank point to the deal’s strategic implications. India’s exports of textiles, jewelry, and machinery, previously burdened by high tariffs, will gain better access to the U.K. market. Conversely, the U.K. gains entry into one of the world’s fastest-growing consumer markets, particularly for luxury goods like Scotch whisky, gin, and automobiles areas previously constrained by duties as high as 150%.

Structural Benefits and Sectoral Gains

The FTA promises dual benefits: lifting trade volumes and supporting employment and industrial growth in India. By lowering duties on high-tariff categories such as liquor, which will gradually fall to 40% from 150%, and automobile imports, which will see a reduction to 10% within five years, British exporters will become more competitive in the Indian market. For Indian exporters, the removal of tariffs on textiles and gems is expected to drive significant volume increases and job creation.

The U.K. government estimates the deal could add £4.8 billion ($6.5 billion) to its GDP annually, a modest but meaningful addition to its £2.85 trillion economy. For India, the deal is seen not only as an economic win but a diplomatic one. With U.K. accounting for just 3% of India’s total trade, the agreement’s importance lies more in the market signal it sends than immediate gains.

Global Implications and Trade Leverage

Analysts suggest the agreement may shift the balance of future trade negotiations. With the U.S. raising tariffs and erecting barriers on tech and industrial goods, both the U.K. and India stand to benefit from diversifying trade ties. Natixis economist Alicia Garcia Herrero notes that the pact gives both countries “leverage versus the U.S.” as they seek more favorable terms in ongoing and upcoming talks.

For India, this deal strengthens Modi’s broader effort to position the country as a manufacturing and trade alternative to China. The FTA’s provisions especially the exemption of Indian temporary workers from social security contributions for three years also support cross-border labor mobility and signal India’s willingness to align with global market standards.

Outlook and Ratification Challenges

Though the agreement must still be ratified by both parliaments, a process expected to take several months, political consensus in both countries suggests minimal resistance. However, the real test will lie in implementation. Questions remain about how quickly businesses can adapt to the new trade framework and whether regulatory adjustments especially in the automotive and alcohol sectors can keep pace.

India’s trade surplus with the U.K., which has widened in recent years, may initially grow before narrowing as British exports scale up. Yet, as ANZ economist Dhiraj Nim notes, while the direction of the trade balance is uncertain, “overall trade volume is certain to rise.”

In essence, the U.K.–India FTA is more than a bilateral accord; it is a strategic realignment that underscores a growing trend: mid-sized powers forging ambitious, independent trade paths amidst an era of global fragmentation.