My Opinion on Over Extending Gains: Recently, the CNBC news/discussion was about a delivering alpha investor survey that indicated about two thirds of investors believe the markets have gone too far, too fast. Hmmm. Going back to the top in January of 2022, the S&P 500 is up 9.4% as of Wednesday’s close. The return for buy-and-hold investors is less that 10% over the last 2+ years. It doesn’t seem too fast or two far for me. Markets have jumped up since the 25% down, Bear-market-bottom in October of 2022, but that’s what happens when Bear markets end.
The S&P 500 touched its lower trendline Tuesday and bounced higher afterward – buy the dip remains.
Still, there are some indications that are concerning: (1) The S&P 500 is 13.8% above its 200-dMA. (A number greater than 12% above the 200-day can be a concern, but it can get even further stretched after a significant bottom, i.e. bear market.) (2) Late-day action has been weak recently suggesting the Pros are getting concerned.
Bottom line: I am still more than fully invested, 65% in stocks (100% S-fund in the TSP.) I remember an investment advisor who said Federal employees can get more aggressive because the retirement plan is guaranteed money.
