Quote of the Day: Declining Bullishness is Bullish

Like the folks at Bespoke Investment Group, I feel better about the market when the majority of individual investors don’t:

While consumers continue to feel more and more positive about the economy, the post-election jump
we saw in bullish stock market sentiment has faded quickly. This week’s AAII bullish sentiment reading
of individual investors dipped down to 31.58%. It has now given up nearly all of its post-election bump.
As we always mention, this constant skepticism about the market from individual investors is actually a
good thing for the long-term health of stocks in our view.

In case you missed it, here’s the link to my January 14 post, where I dug into the topic. Here’s a snippet:

Fascinating! In all nine instances when bullishness was reaching its lows — and yes it was indeed low in those instances (under 40%) — the market was either beginning. or in the midst of, an impressive upward run. So, apparently it does indeed pay to be the contrarian — just more so when the crowd’s the most gloomy.  

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