The S&P 500 is about to open at an all-time high.
Here are some numbers:
- This will be the 777th intra-day all-time high since 1982*
- All-time highs have happened on just over 8% of all days
- The average 1-year return is 10.2%. The average 1-year return following an all-time high is 11.5%. This does not include dividends
So everyone is bullish right? Hardly. According to Barron’s latest Big Money Poll, only 27% of money managers are bullish on the stock market over the next 12 months, which is the lowest reading in 20 years.
I don’t think people are worried because stocks are at all-time highs. This poll was probably conducted a few weeks ago. But it’s funny how all-time highs, which are as bullish a signal as you can ever get, makes people more cautious. At all-time highs you remember the dot-com bubble. At all-time highs you remember the great financial crisis. At all-time highs you remember how quickly these gains can evaporate.
I understand this sentiment, but it’s almost impossible** to be a good investor if the most bullish signal in the world is interpreted as anything other than what it really is.