Investor Sentiment is Elevated to Extreme Levels

By on December 30, 2013

Current readings of investor sentiment indicate we haven’t seen this level of bullishness in the past decade, according to The Short Side of Long blog. A look at the site’s Composite Sentiment Index shows about 70% of investors are bullish on the market’s prospects [see chart below].

The bullish readings indicate stocks are at dangerous levels and investors should be careful about committing funds towards equities at this juncture, which appears fraught with risk.

Investors Intelligence AAII Survey

Likewise, the TTS Fear Index showed a reading of 2.0 on Friday, indicating investor complacency not seen since October 2006.

Back in March, The Short Side of Long blog warned of investor euphoria based the Merrill Lynch Fund Managers Survey [link].

Source: The Short Side of Long

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