Young Research & Publishing Inc.

Investment Research Since 1978

Disclosure

  • About Us
    • Contributors
    • Archives
    • Dick Young’s Safe America
    • The Final Richard C. Young’s Intelligence Report
    • You’ve Read The Last Issue of Intelligence Report, Now What?
    • Dick Young’s Research Key: Anecdotal Evidence Gathering
    • Crisis at Vanguard
  • Investment Analysis
    • Bonds
    • Currencies and Gold
    • Dividend Investing
    • ETFs & Funds
    • Investment Strategy
    • Retirement Investing
    • Stocks
    • The Efficient Frontier
  • Investment Counsel
  • Dynamic Maximizers®
  • Retirement Compounders®
  • Free Email Signup

Are the Pieces Finally in Place for a Bear Market?

June 22, 2018 By Jeremy Jones, CFA

By Angyalosi Beata @ Shutterstock.com

The FT reports here that bearish investors may have finally capitulated. Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. John Templeton said that. A lack of bears is a necessary precondition for a bull market, but it should not be viewed as a catalyst for a bear.

Media commentary, which invariably reflects the opinions of influential market participants, appears to be becoming steadily less bearish the further we move away from the last crisis. My colleagues on FT Alphaville have pointed out that the number of articles mentioning the term “market bubble” have fallen sharply, with mentions in 2017 sightly higher than the year before, but lower than every year since 2013. Media mentions of this term, according to a Factiva search, were also lower than the years between 2002 and 2008.

Professional investors meanwhile appear to be engaging in buying behaviour apparently contradictory to their views on the market. The closely followed Bank of America Merrill Lynch monthly fund manager survey, which polls investors managing $541bn of assets, showed in June that equity investors had returned to being overweight US equities for the first time in 15 months. This is in spite of US stocks being the most richly valued of all developed markets. At the same time the respondents said they were most overweight global technology shares, while simultaneously believing that being long large US and Asian technology shares was the “most crowded”, and therefore dangerous, trade at the moment.

On top of all this a growing number of commentators have moved from warning of overvaluation to simply acknowledging markets are expensive, and encouraging their followers to remain invested and run away just before things get ugly. This is at precisely the time when higher interest rates in the United States will probably diminish the appeal of stocks to investors previously desperate for yield.

Read more here.

Share this:

  • Email
  • Twitter
  • Facebook

You Might Also Like:

  • The Global Bear Market
  • Bond Bear Market Picking Up Steam
  • Does this Explain the Bear Market in Stocks?
  • Author
  • Recent Posts
Jeremy Jones, CFA
Jeremy Jones, CFA, CFP® is the Director of Research at Young Research & Publishing Inc., and the Chief Investment Officer at Richard C. Young & Co., Ltd. Richard C. Young & Co., Ltd. was ranked #5 in CNBC's 2021 Financial Advisor Top 100. Jeremy is also a contributing editor of youngresearch.com.
Latest posts by Jeremy Jones, CFA (see all)
  • Are Google, Amazon, and Microsoft About to Crash This Specialized Real Estate Market? - June 29, 2022
  • Regulators’ Bungled Attempts to Cut Emissions Drove Oil Prices Higher - June 28, 2022
  • What Happens to Your Passwords When You Die? - June 27, 2022

Search Young Research

Most Popular

  • Here’s Why You Need a 15-Year Retirement Investment Plan
  • Will the Fed Stick to Its Course?
  • Why Work When Taxes Take It All?
  • The Power of a Compound Interest Table
  • RECESSION? Dow 25,000, $8 Gas, Rising Interest Rates, Spell Mid-term Crack Up
  • Investing During a Recession
  • Is the Great Job Boom Over?
  • Are Google, Amazon, and Microsoft About to Crash This Specialized Real Estate Market?
  • What Happens to Your Passwords When You Die?
  • Vanguard Wellesley (VWINX) vs. Wellington (VWELX): Which Fund is Best?

Don’t Miss

Default Risk Among the Many Concerns with Annuities

Risk and Reward: An Efficient Frontier

How to be a Billionaire: Proven Strategies from the Titans of Wealth

Could this Be the Vanguard GNMA Winning Edge?

Cryptocosm and Life After Google

Warning: Avoid Mutual Fund Year End Distributions

Is Gold a Good Long-term Investment?

How to Invest in Gold

Vanguard Wellington (VWELX): The Original Balanced Fund

What is the Best Gold ETF for Investing and Trading?

Procter & Gamble (PG) Stock: The Only True Dividend King

The Dividend King of the North

You’ll Love This if You’re Dreaming of an Active Retirement Life

RSS The Latest at Richardcyoung.com

  • An Assault on America’s Central Core
  • Hillary Clinton Claws at Relevance by Publicly Insulting Clarence Thomas
  • RURAL RENAISSANCE: America Finds the Country Again
  • The Best Investment Strategy is Simple, Like Analog Music
  • RED WAVE COMING? Americans Fear the Future of Biden’s Economy
  • Biden’s Approval Lower Now than Trump’s Was after January 6, 2021
  • With a Nod from Turkey, Finland and Sweden Speed Toward NATO Membership
  • 10th AMENDMENT: Dobbs Decision a Win for States’ Rights
  • What Just Happened? Fixing Its Historic Mistake
  • Why Work When Taxes Take It All?

About Us

  • About Young Research
  • Archives
  • Contributors

Our Partners

  • Richard C. Young & Co.
  • Richardcyoung.com

Copyright © 2022 | Terms & Conditions

 

Loading Comments...
 

    loading Cancel
    Post was not sent - check your email addresses!
    Email check failed, please try again
    Sorry, your blog cannot share posts by email.