“The highest commitment to stocks since the record levels of early 2000”
Elliott Wave International
We all love Mom and Pop and cherish the valuable lessons about life they’ve given us along the way.
But, Mom and Pop might need to learn something about investing themselves.
Keep in mind that the American Association of Individual Investors’ (AAII) weekly survey is said to be representative of “Mom and Pop” investors, well-known for being quite cautious.
August 2021 Elliott Wave Financial ForecastAs the stock market staged a major rally,, a publication that provides analysis of U.S. financial markets discussed their behavior:
In July The average AAII allocation for the past five months increased to 70.6%. This is a high number for this group of investors who are normally hesitant. … This is the highest commitment to stocks since the record levels of early 2000.
The sentiment indicator isn’t meant to be a precise market timer, but it did seem that these usually cautious investors made the right choice. The rally continued for the rest of 2021. But, by early January 2022, the Dow Industrials and S&P 500 hit their all-time highs and have traded lower since.
What does this mean?