Advisors Are The Dumb Money Indicator

ETF Trends is reporting that advisor sentiment continues to rise:

Bullish sentiment among advisors continued to climb in the latest week to 47.4% from 44.2% the previous week and 34.4% (which was the lowest reading since March 2009) at the start of October before the stock market blasted off, Investors Intelligence said Wednesday.

…The number of bulls rose for the fifth straight week. “The bulls jumped with the rally and are now nearly 15% above the bears. The current reading for the bulls is approaching the danger area above 50%. Market moves often end with the bulls near 55%,” Investors Intelligence said.

The irony, of course, is this is a contrarian indicator. If Advisors are feeling better about things, that means things are simply going up.

In March 2009 the Advisors Bearish Sentiment peaked at 47.2%. That high reading signaled that the Advisors polled were raising cash and contrarians recognized it as a buying opportunity. And they were right, the market is up like a 100% since.

So remember, the Advisor Sentiment Indicator is for tracking dumb money, let’s just hope your advisor isn’t one of the people being polled.

For more on the subject, you gotta jump over to see what my boy, Josh Brown, wrote on the topic of volatility in the WSJ Financial Adviser section today.


Market Volatility and the Priorities of an Adviser (WSJ)

Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer. is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to and affiliated sites.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.