Like the Fear vs. Greed indicator the Bank of America has its version of the Fear Index, which they call the “BofA Bull & Bear Indicator”.
“Bull” implies a positive outlook for market returns while “Bear” implies a negative outlook for performance.
Here is their 8/26/2022 update:
Yes, sir! “0.0%” are positive.
This is rare air. In my forty-year career I have seen this level of fear on only two other occasions, at the end of The Great Recession in March of 2009 and right after the pandemic induced shutdown of the planet.
No one, including me, knows the future, yet it would be reasonable to ask ourselves “What happened after those two prior 0.0% readings?” Well, since The Great Recession, the Dow Jones Industrial Average (DJIA) is up more than 300% and it is up over 10,000 points, or about 50%, in the roughly 2 ½ years since the pandemic bottom.
As the old saying goes at market peaks, “It’s different this time”, to justify investing at the high. I suspect the same saying applies to the current 0.0% reading above to justify sitting on the sidelines biting our nails.
We will see, but it sure feels like we are clunking along, or close to, the bottom range of valuation.
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.