The Weekly Update 7/18/2025™ 

What Fear and Greed Look Like!

In the April 2025 update for The Seven Signs of a Changing Economy™, (Read it Here), under Sign #2, I presented the Fear verses Greed chart below.  Just a mere three months ago it rested at 4 out of 100, i.e. pure fear!

Currently that Pure Fear has jumped to Extreme Greed at 75 out of 100!

Significant changes like this are difficult to quantify.  However, my 43 years of investment wisdom plus a touch of body english suggest the cause is short sellers having to buy back shares to cover losses, (Read it Here, April 2025 Seven Signs, Sign #2), A.I. productivity now appearing in the earnings of Corporate America and the profit margin increases we are seeing.

Phase two is just starting, I think.  What is Phase two?  Fear of missing out (FOMO).  Arguably, FOMO could add another +10% onto the current valuations of Corporate America.

Mr & Mrs. 401(K), well, they aren’t buying into that extreme greed!  No sir, they just sold another $79.91 billion in mutual funds over the last month.  Of course the buyers of those shares of ownership gained about +3% (annualized +36%!) for the help they provided in liquidating Mr. & Mrs. 401(K).

Here is the money flow since January 2025 per The Investment Company Institute (ICI), as of 6-25-2025.  

12/24/2024 – 01/22/2025    outflow - $ 63.76 billion
01/22/2025 – 02/26/2025    outflow - $ 79.87 billion
02/26/2025 – 03/26/2025    outflow - $ 65.25 billion
03/26/2025 – 04/23/2025    outflow - $ 41.97 billion
04/23/2025 -  05/21/2025    outflow - $ 49.05 billion
05/21/2025 – 06/21/2025    outflow - $ 79.91 billion

And per Bloomberg Research on 6/9/2025, we know a few of the big buyers of Mr. & Mrs. 401(K)’s sells.  Corporate America themselves bought back their own outstanding shares totaling $283 billion in 1Q2025 alone.  That is an amazing $1,132 trillion annualized in share buybacks!

The sellers are clueless.  The buyers, well they are the “insiders” who see their business dashboard all day every day and they like what they see enough to invest a trillion dollars!

I did not say market valuations go straight up, and I did not say without volatility, yet the data flow suggests the good old USA has a very bright outlook.  Think “Five Year Money” (Read it Here)..

I’m interested in your thoughts, comments and observations.  Feel welcome to call, email, or stop by the office and say Hi.

Respectfully,
James O. Lunney, CFP®
CERTIFIED FINANCIAL PLANNER™ Professional  

*The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

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