The love-hate relationship many investors had with US stocks during the 11 yr Bull market is reemerging, as stock steadily climb the Wall of Worry in the face of economic devastation and uncertainty.
The benchmark S&P 500 index has risen 34% from its 23 March lows and the NAS Comp is just 6% shy of record highs, investors are more Bearish than they have been in years and Key measures such as unemployment and GDP are giving their worst readings since the Great Depression.
The contrast between the stock market’s performance and investor sentiment echoes the no other place for the money argument that dominated investor thinking pre-C-19 coronavirus, when ultra-low rates around the world and the US economy’s relative outperformance drove global investors into US stocks as they whined about high valuations and soft earnings.
That is more prevalent now, as the Fed has pledged to keep rates at Zero for the foreseeable future, and feeding the economy with trillions in stimulus and purchasing an unprecedented range of assets in a bid to support markets and boost investor confidence.
Today, 68% of fund managers believe Wall Street’s rally is a temporary bounce within a broader downturn, according to a recent survey by Bank of America Global Research. Sidelined cash among institutional investors, aka managed money, is at 5.7%, compared to a 10-yr average of 4.7%, the survey showed.
Retail investors are wary too.
Many of us view times like these as the right time to invest. Worries over the market’s health were a frequent feature during the recent 11-yr run in stocks that saw the S&P gain 400%.
I am Bullish, because I believe we will get an economic recovery in 2-H and going into Y 2021. The fact that everyone else is Bearish makes me feel good. that + all of my technical indicators are Very Bullish across the board. Remember, always take what the market gives.
Have a healthy day, Keep the Faith!