I’m 66 years old, have a paid-off house and $100,000 sitting in cash. Would this be a good time to invest it all in the S&P 500?

The S&P 500 is 16.5% above this year’s low, according to Morningstar (1) — though there are concerns that the party can’t last forever.

Patricia doesn’t need the money right away. She’s planning to take her Social Security benefit at her full retirement age (FRA) of 67. In the meantime, she’s living off her savings and bringing in extra cash through her part-time consulting work.

While she’s in a good financial position, she also doesn’t want to risk losing her $100,000 if the market crashes.

What’s happening with the stock market

The S&P 500 has been rallying since the end of March — despite the war in Iran and a blockade of the Strait of Hormuz that’s led to the largest oil-supply disruption in history, which has sent oil prices through the roof.

The U.S. stock index initially fell during the first few weeks of the war, which began Feb. 28. But stocks have since rallied, now trading near all-time highs.

“The stock market isn’t trying to price what’s happening today,” Joe Seydl, senior markets economist at J.P. Morgan Private Bank, told CNBC (2). “The stock market is always trying to price what the world is going to look like six to 12 months from now.”

And investors are betting that the Iran conflict will be short-lived. They’re also hoping that President Trump’s meeting with Chinese President Xi Jinping in Beijing on May 13 could lead China to push Tehran towards de-escalation.

At the same time, the S&P 500 has been boosted by gains in tech and AI-related stocks — in part driven by high demand for new data centers to fuel the rapid growth of AI. This is despite concerns of inflation related to rising oil prices (3).

Still, there are concerns of a market correction (or a crash) amid fears that the war is dragging on and that the AI bubble could burst. Billionaire investor Warren Buffet says the stock market is “playing with fire (4),” and ‘Big Short’ investor Michael Burry is warning of a dot-com-style crash.

To invest or not to invest?

Since its launch in 1957, the S&P 500 has delivered annual returns of around 10.5% (5). Markets have also historically rebounded after a crash, although the timelines vary. So, if you might need the money sooner rather than later, investing in the S&P 500 could be a riskier proposition.

For an older American like Patricia, deciding to invest more of her money in S&P index funds is a matter of risk tolerance. Most people who’ve reached retirement age are taking a different strategy, shifting to more conservative investments to reduce exposure to market volatility.

On the other hand, being too conservative could erode your purchasing power over time. For example, if Patricia’s $100,000 is earning 1% and the rate of inflation is 3%, then she’s losing 2% in purchasing power.

If Patricia doesn’t need the money for another five to 10 years, she could potentially afford to take more risk — if she’s up for it. She’ll have to decide how much risk she’s comfortable with and if a market crash would cause her to lose sleep at night.

There are a few other considerations, too. While Patricia is healthy, life happens. She’s covered by Medicare, which kicks in at age 65, but it doesn’t mean she’s covered for everything. For example, Medicare doesn’t cover long-term care in an assisted living facility.