August 24, 2016

Yesterday afternoon Andy Anderson spoke to 10 individuals at an investment club about their current feelings towards the overall Stock Market. Two said “bullish” and eight said “fearful/neutral”. As technical analysts of the market who use charts and balance sheet numbers to determine our interest in owning a company’s stock, we sometimes like to stray and hit the street to ask individual investors what they are feeling. It may not be the most empirical of information sources, but it definitely will give you an idea of what the masses are thinking and doing. In this case, 80% of our survey group who are individuals in retirement age are not feeling positive about the market and are either on the sidelines or running to defensive vehicles like municipal bonds, gold or anything with a yield/dividend/”mailbox money”. The danger arising for these individuals is based off a single quote by one of E.F. Hutton’s founder, Gerald M. Loeb, which says “…most mass movements of majority point of view, are usually wrong“. We fear many investors will fall into ponzi schemes (Stanford Financial Group) during this time of fear and apathy as they search for current income and high-yield products.

While news accounts describe the market as “stagnant” and investors’ attitude toward stocks as “apathetic,” the facts as we see them are that the broad market remains strong—and that the lack of enthusiasm among investors is actually a good thing. All BF/Anderson’s trend-following indicators remain positive and thus we continue to recommend aggressive investment in a diversified portfolio of stocks.

If you have any questions please feel free to message us on our contact page or email bfanderson@bfanderson.com.

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