Dumb Money Confidence Reaches 80%
Dumb Money Confidence has exceeded 80%, which is lower than where it was in April but still historically high, ranking in the top 2.3% of all daily readings since 1999.
When it has been above 80%, the S&P 500’s annualized return was -4.5%, versus +35.1% when Confidence was below 25%. After Confidence crossed above 80% for the first time in a month. Returns were poor, especially over the next month, with only a 33% win rate. See the July 17, 2019 report for more detail.
That has been even more true when excluding the bear market bottoming years of 2003 and 2009, or when looking at recent history, such as the past 7 years.