Retail investors were right in 1999 and 2007. Right?
Wrong. They went all in at the peaks.
Guess when they had the largest allocation to cash?
That’s right. They had huge cash positions at the bottoms in 2002 and 2009.
They now have the lowest cash allocation since 1999. This is after the market has risen by 175%. Margin debt is also at a record high. The Wall Street shysters see happy times ahead. Bears are dead. Bulls are stampeding.
I’m sure the retail investor will be right this time. Just like always.
“According to the recent AAII Asset Allocation Survey by retail investors, cash levels in July dropped to the lowest level since 1999 at only 15.8%. Just as this was happening, European markets like DAX 30 have started a free fall of 10% in only a few weeks, while S&P 500 is also experiencing the strongest sell off in months. It seems to be that the same old theme of buying very high and later down the track, most likely panic selling into an upcoming low, will once again be occurring.”