A strong bullish sign
What do they know?
Amateur investors are emotional in their asset allocation.
When the market is strong and Wall Street is enthusiastic about the market, they start allocating more and more cash to equities.
They tend to become conservative when the market fails to appreciate or enters a boring period like the present one.
Fear comes into play and investors start allocating more an more of their capital to cash. Unfortunately they are always too late to the party.
This is exactly what is happening now. Investors are afraid and are moving they investments into cash. This is a great signal. It may be telling us we are closer to the time to buy stocks.
Why? Because as shown in the above chart, investors are always wrong at major turning points.
George Dagnino, PhD
Editor, The Peter Dag Portfolio
Author, Profiting in Bull and Bear Markets
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