I wanted to share some charts that appeared in a recent Bloomberg.com article. They confirm my own experience in speaking with clients and prospective clients at this time: everyone is nervous and untrusting of the stock market. Fortunately, bear markets usually begin from a psychological place of extreme bullishness. So the emotional conditions suggest we are not about to see a market collapse.
Equally fortunate, our clients are well diversified. While stocks are certainly a significant component of their portfolios, they also enjoy extensive holdings of bonds, preferred stock (similar to bonds in that they have low exposure to common stock behavior) and in cash and certificates of deposit. I hope you find the article below of interest.
Gary Miller, CFP™
From Bloomberg: “These Six Charts Show Investors Don’t Have Faith in U.S. Stocks” By Oliver Renick, May 3, 2016
These Six Charts Show Investors Don’t Have Faith in U.S. Stocks
While $3 trillion has been added to equities in 11 weeks and the S&P 500 has recently been points from a record, you couldn’t tell from the behavior of investors. From flows to exchange-traded funds to levels of short interest and valuations for defensive stocks, bearish sentiment rules. Here are six charts that show how skeptical investors still are.
Seeking Safety
Four of the five most popular exchange-traded funds this year are ones purporting to offer less risky investments than the stock market at large, according to data compiled by Bloomberg. Among them is the iShares MSCI Minimum Volatility ETF, which has garnered $4.7 billion in cash, more than any other fund. That compares with its three-year total flow of $7.6 billion. READ MORE…
