In The Weekly Update for 6/10/2022 (Read it Here) I presented this BofA Global Investment Strategy “Bull & Bear Indicator” chart from March of 2020.
Observe it was exactly 0.0, “Extreme Bearish”, i.e., the most negative outlook for investors. You could make a case for this, as Covid was just starting to turn the lights out on planet earth.
So, how far have we come in the last 2 ¼ years as the world’s lights have gotten turned back on, to the point we can’t keep up with demand, i.e., we are so busy we can’t get enough people to work?
Well, as it turns out, investors are exactly the same level of petrified as they were when the world stopped spinning. Check it out:
Goose Eggs! Very rare, as in there are only two times in history!
Yes, valuations are down and that is not fun, pleasant or encouraging. But, if what follows is anywhere close to what happened after March of 2020, we could be nicely rewarded going forward. At these levels you could reasonably conclude that investors who want out are out, or close to out, of their investments, leaving plenty of upside ahead!
I did not say starting tomorrow. I am saying for those of us with “five-year money” (Read it Here) this could be the point where we start to thoughtfully nibble on what investments might be strong performers over the next few years.
The Fed has publicly stated there will be at least two, or more, interest rate increases into the fall. And then there will be the nasty pre-election mudslinging.
These are time points that could offer additional downdrafts in valuations, or as I would like to call it, opportunities to pick up companies, at fair prices, that could perform well going forward.
I’m interested in your thoughts, comments and observations. Feel welcome to call, email or stop by the office and say Hi.
James O. Lunney, CFP®
CERTIFIED FINANCIAL PLANNER™ Professional
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Investing involves risk including loss of principal. No strategy assures success or protects against loss.