Dumb Money is All-in On the Stock Market

Small investors are a levels of bullishness that is usually only seen at major market tops. It’s probably time to start de-risking (47 sec).

Treasury bills provide a return than stock market earnings yield right now. Also a very bearish harbinger.

Do with it as you will. Not investment advice.

• Dumb Money Confidence Index:
  • The “Dumb Money Confidence” index recently reached its third-highest reading in 25 years.
  • This index reflects the collective investments of retail investors, suggesting high confidence in the stock market.
  • Meanwhile, the VIX volatility index (Wall Street’s “fear gauge”) traded at its lowest levels since 2019.
• Retail Investors vs. Smart Money:
  • “Dumb money” refers to everyday at-home investors, often considered the opposite of professional “smart money” investors.
  • During the GameStop trading frenzy, retail investors disrupted Wall Street by driving up the company’s shares, challenging conventional wisdom.

h/t Tonight We Ride!