The FTSE 100 last hit an all-time high on 27 February, closing at 10,910.55. Since then, it’s failed to break that record for over six months – the longest stall in more than two years.

So has the rally run its course? Nobody can say for sure, but history shows corrections create the best opportunities for patient investors.

That’s why I think it’s worth considering whether to store up some precautionary cash. Not to exit entirely, but prepare for what might come next.

Cash returns look strong – but so do risks

On paper, the FTSE doesn’t look weak, at least not on income terms. September alone could deliver around £16.7bn in dividends from 41 leading Footsie firms, lifting 2026’s total to roughly £88.8bn. Add in about £45bn in planned buybacks, and UK shareholders are set to pocket serious cash this year.

Yet the backdrop feels less straightforward. Valuations in parts of the index look stretched, earnings revisions are already optimistic, and the UK’s structural headwinds haven’t vanished.

That mix suggests now could be a sensible time to trim winners. I’m not saying abandon the long-term strategy, just keep some cash ready for bargains if the market dips.

So what shares am I looking at?

A standout performer at a premium price

Rolls-Royce (LSE:RR.) has been one of the FTSE 100’s top performers, backed by strong civil aerospace demand, defence programmes and a growing order pipeline.

But the valuation’s demanding. Recent data show a price-to-earnings (P/E) ratio around 41.08 and a price-to-book (P/B) ratio near 42.79. That isn’t surprising, considering the past few years. The share price has surged about 831%, with revenue climbing from £15.4bn in 2023 to £20.1bn in 2025. Even more impressive, its underlying operating profit has more than doubled.

No other stock has achieved that kind of post-pandemic recovery. But there are still risks to think about: flight disruptions, cyclical defence spending, and small modular reactors that must yet prove commercially profitable.

Overall, I still believe the company has years of growth ahead. Management looks stronger than ever and demand remains resilient. It’s just that the current high price doesn’t scream obvious value.

Don’t panic, prepare

Yes, the FTSE 100’s momentum looks to be slowing, but that’s no reason to panic. It might however, be a good reason to plan for a correction and start watching for opportunities if overvalued stock prices dip.

At times like these, putting cash aside and waiting for clearer entry points is a popular strategy. If quality stocks like Rolls-Royce fall 15%-20%, they could offer a once-in-a-decade opportunity for value investors. So it’s definitely worth considering.

The key is discipline: sell into strength, buy on weakness, and keep emotions out of it. After all, the best trades often come when others are rushing for the exits. That’s why I’m staying cautious, even as dividends and buybacks paint a rosy picture.

Looking ahead, I’ll be watching the index closely, ready to act if valuations become more attractive. Because when the next dip arrives, I want to be ready – not stuck on the sidelines. That’s the mindset I’m taking as we head toward the last quarter of 2026.

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Mark Hartley does not hold any positions in the companies mentioned.