Nobody Move, Nobody Get Hurt

Retail investors have simply given up, that’s what Josh Brown says. I can’t say I disagree. In general, through all of the volatility we’ve witnessed I do see people wanting to chomp at the bit, but there just isn’t a rush to do anything here: buying or selling.

The boys at Bespoke sum it up:

In spite of the fact that the S&P 500 came into today down three days in a row and 3.5% on the week, individual investors remained calm and actually turned more bullish. According to the weekly survey from the American Association of Individual Investors (AAII), bullish sentiment rose from 38.6 to 40.2. This ends a streak of three straight weeks below 40%.

Now, the AAII Survey has always been known as a dumb money indicator. The Advisor Sentiment Survey isn’t much better. And the market has been a mess all year, so if you are reacting now, you and/or your advisor should probably legally change your name to Rip Van Winkle. But let’s face it, if Brokers With Hands In Their Faces was one of the viral sensations coming out of Wall Street this year I think it’s safe to say everyone is pretty much ready to just move on.

Personally, I think the mood swings of this year can be summed up in the email exchanges I’ve had with a client in the last two weeks:


From: Awesome Client

Date: December 5, 2011

China?! Should we be buying??

And here’s the reader’s digest version of my reply. Basically I said, I wouldn’t buy right now but like it long term.

His reply: Agreed.


Five Days Later…


From: Awesome Client

Is It Time To Get Out? What are your tea leaves saying?

My reply:

For most of your holdings we’ve bought companies that are paying dividends allowing us to wait, and we bought them because I think they will likely either survive or thrive in this environment. I don’t see a reason to sell here, especially since we are already underweight equities.

His reply: Got it, thanks!


Yep… It’s been that kind of year.

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