Here’s the thing about all-time highs: they happen *a lot*. Like, way more often than people think. Yet every time the market hits a new record, investors collectively lose their minds, convinced this is the moment everything collapses. Spoiler alert: it usually isn’t.
Erik Smolinski, a full-time options trader who actually beats the S&P 500 (not just talks about it), says the current market setup is genuinely weird—but not in a “sell everything and buy gold” kind of way. It’s more like “interesting times” weird.
The market’s been on a tear lately. Stellar earnings, the Iran war basically shrugged off, and investors acting like they’ve discovered some secret cheat code. Meanwhile, the Federal Reserve situation has gotten complicated. Will they keep rates high? Raise them? Nobody knows, and that uncertainty is baked into everything right now.
Don’t Panic-Sell Just Because Numbers Go Up
Smolinski’s first piece of advice is refreshingly simple: stop freaking out about record highs. Yes, it’s natural to get nervous. Yes, it’s tempting to hedge your bets or reduce exposure. But here’s the reality check—the market spends most of its time near all-time highs. That’s literally how markets work. They go up.
“If you’re in equities, you’re looking for risk,” Smolinski says. “That’s how you make money. If you get too hesitant, what are you even doing here?”
The pundits will absolutely lose their minds talking about imminent collapse. Ignore them. All-time highs alone aren’t a reason to bail.
The Real Signal: Watch the Bonds (But Not How You Think)
Here’s where it gets interesting. Smolinski isn’t obsessed with whether the 10-year Treasury yield hits 5% or 4.5%. What actually matters is how fast it moves.
A slow grind toward 5% on strong economic growth? Totally different animal than a sharp, chaotic spike. A 40-to-50-basis-point move in a couple weeks? That’s the kind of velocity that historically breaks stocks.
He’s also watching real yields—the ones adjusted for inflation. A 5% yield means something completely different when inflation is 2% versus 4%. When real yields push toward the top of their post-2022 range, bonds start genuinely competing with stocks for your money. And the reason yields are rising matters too. Hot growth? One thing. Inflation re-accelerating or deficit worries? That’s historically ugly for risk assets.
At the time of the interview, the bond market was pricing in rate hikes next year, not cuts. That’s notable because stocks are near records while rate expectations have gotten less friendly.
Actually Review Your Portfolio
Smolinski’s not saying panic. He’s saying don’t be complacent either. Take a real look at what you own. Are you too concentrated in one stock, sector, or theme? Do you actually understand why you own each investment? Does your asset allocation still match your time horizon and risk tolerance?
This isn’t about predicting what the Fed will do. It’s about understanding your portfolio well enough to hold it if conditions get messier.
The bottom line: record highs aren’t an exit signal. But they’re a good reminder to make sure your portfolio still makes sense.
