Chart of the Day

| October 12, 2018
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While this post may be a bit wonky I wanted to provide actual facts instead of media spew.

We often hear the phrase ‘cash on the sidelines’ or ‘investor buying power’ from those who want you to perpetually be invested; however, as you can see from the chart below, investors are holding a very large allocation to stocks at this point in time. As of the end of the 2nd quarter it was 55.74%.

So what does this mean?

Historically speaking, when investor allocations to stocks is at these levels, this is typically a sign of investor enthusiasm. This also spells sub-optimal returns going forward,

Historically the range is -3.03% to 8.43% over the subsequent 10 year period. The average is a paltry 3.98%.

This is not intended to strike fear or anxiety, but to attempt to establish future return expecations.

 

Stay Tuned, Disciplined & Patient! {TJM}

The Investor & Character Equation (ICE) | S + R = O

 

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