The S&P 500 index rose another 3% last week, continuing a winning stretch that began last fall. Since Nov. 7, the S&P has risen 22%. That works out to be a roughly 35% annualized gain. Trouble is, the rally is increasingly due to a perception by individual investors that stocks can only move in one direction: up. In its most recent survey, the American Association of Individual Investors… Read More
The S&P 500 index rose another 3% last week, continuing a winning stretch that began last fall. Since Nov. 7, the S&P has risen 22%. That works out to be a roughly 35% annualized gain. Trouble is, the rally is increasingly due to a perception by individual investors that stocks can only move in one direction: up. In its most recent survey, the American Association of Individual Investors (AAII) noted that the percentage of investors who are currently bearish is now less than 20%. That’s the lowest reading in 18 months, yet as legendary fund manager Sir John Templeton once noted, “The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.”#-ad_banner-# I’ve already researched one half of that maxim. Back in 2010, I noted that stocks tend to rally when that AAII survey finds few bullish… Read More