There is an old Wall Street adage most of you know. Bull markets climb a wall of worry.
I recently came across the weekly survey of Investor Sentiment from the AAII.
Bullish sentiment sits at just under 30%. Put another way, over two-thirds of investors are neutral or bearish. You have to go all the way back to January to find a reading above 40%. And 40% isn’t that euphoric.
Fundamentally speaking
Think about it. The economy is moving along at a modest pace, inflation is low, corporate profit growth is strong, and interest rates remain near historic lows. If I had to come up with a recipe for a rising stock market, I’d bake a heavy dose of those ingredients into the cake.
Still, most investors aren’t very ecstatic.
Without a doubt, there is no shortage of scary headlines. But the headlines just aren’t having much of an impact on shares.
I’m not smart enough to time the next correction. Who is? But as we turn the corner and head into fall, the fundamentals are setting the tone.