Of course, some analysts wonder if this is a signal that the market is about to start pulling back on its bullish tendencies (on both the theory that the small investor is “always wrong” and the fact that buying power eventually runs out of steam).
The Journal wrote this past weekend,
However, most evidence suggests that individual investors remain underinvested in equities compared to periods during the last century and just before the 2008–2009 financial crisis. Money Magazine wrote recently, “Even as this bull market more than tripled the value of stocks over the past eight years, the percent of households that actually own equities has sunk from 62% in 2008 to 52% last year, according to a survey by Gallup. That’s the lowest level of stock ownership in the 19 years that Gallup has been tracking this data.”
Do you, personally, or jointly with a spouse, have any money invested in the stock market right now—either in an individual stock, a stock mutual fund, or in a self-directed 401(k) or IRA?
It is also of interest to observe that sentiment among individual investors is far from excessively optimistic. A recent survey of retail investors by the American Association of Individual Investors (AAII) shows that bullish sentiment is well below the highs achieved in the post-financial crisis period (Figure 3).
Bespoke Investment Group said last Friday,