They did the same in January 2000 just before the dot.com crash. For years, individual investors in the US have been a dreary bunch, as stocks soared relentlessly since bottoming out in 2009. But 18 months ago, in February 2016, they finally caught the bug, and now optimism has surged at a record pace. Optimism about the stock market in particular has reached the record highs established during the Dot.com bubble, just before it all fell apart.
The quarterly Wells Fargo/Gallup survey of investors with at least $10,000 in the markets, undertaken in the period between July 28 and August 6 when the Dow Jones Industrial Average was approaching and then exceeded 22,000 (now at 21,798), investor optimism about the stock market did something very special – something it hadn’t done in 17 years:
68% of these investors said they’re optimistic about the stock market’s performance next year. This matches the prior records set in December 1999 and January 2000. Peak optimism occurred two and three months before one of the most epic crashes commenced in March 2000. 25% of the investors said they’re ‘very optimistic,’ an all-time record, besting the prior record of 24% set in the first quarter of this year. This is up from 11% a year ago!
This post was published at Wolf Street on Sep 10, 2017.
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