Crash confidence

Troy Bombardia
2020-09-26

Yale publishes a monthly Crash Confidence Index (along with other indices) which looks at the % of institutional and individual investors who believe that a stock market crash will be avoided in the next 6 months. This figure has dropped to an all-time low among individual investors and is at the lowest level in over 2 years among institutional investors.

Respondents to this survey have had a mixed track record of success. When so few institutional investors believed that there will be no crash in the next 6 months, the S&P had a greater than average chance of rallying over the next 3-12 months:

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