Good Times May Be Ahead

Big market moves aren't that hard to figure out. All you have to do is understand investor sentiment.

For example, when everyone is selling, they move to cash and markets tank. Eventually, there's no one left to sell. Once so much cash is sitting on the sidelines, earning nothing, investors have to put it somewhere. They start to buy stocks again, and the market reverses.

We think we're near this point today...

The American Association of Individual Investors does a weekly poll of individual investors in its Investor Sentiment Survey. Respondents indicate whether they're bullish, bearish, or neutral on stocks over the next six months. This survey tends to be a great contrarian indicator...

For example, when investors are extremely bullish, markets tend to fall because there aren't many buyers left to drive up prices. And when investors are extremely bearish, markets tend to rise because there aren't many sellers left.

The survey recently showed the most bearish reading since 1990. Think about this for a moment... The last time things were so bearish was more than three decades ago, back in my old Goldman Sachs days.

If you look back at times when the survey reading was 50% or more, markets averaged a 14% gain over the next 12 months. This tells us good times may be ahead for the market.

But if this past week in the market has proven anything – as we've watched stocks fall each day – you can't get complacent.

According to my colleague Greg Diamond, there are four phases to a bear market... the initial decline, the relief rally, panic, and finally, the bottom.

And Greg says we're in the panic phase, which means stocks can keep falling from here. In fact, Greg is warning about an "aftershock" that's coming on May 25.

But you can set yourself up to profit as investors overreact to their fear.

To learn more about Greg's specific prediction, click here.

Here's to our health, wealth, and a great retirement,

Dr. David Eifrig and the Health & Wealth Bulletin Research Team
May 21, 2022

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Recommended Link:

An Aftershock Is Coming on May 25 The man who called the exact days of the 2022 sell-off and 2020 crash is now predicting an "aftershock" on May 25 that could lead to a 50% decline. What's coming next could cost you serious losses. OR... with one move by May 25, you could set yourself up to double your money 10 times... without touching a single stock. Click here to learn more.

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Reader feedback of the week...

Hi Doc. Thank you for discussing meditation in your writings. I learned Transcendental Meditation in 1975, while I was studying to become a Physician Assistant. I practiced it regularly for years, then got irregular for a while. Now, I am back to regular meditation practice. It helps keep me steady. Recently, I've been practicing with a large group online, through Zoom. (We didn't have Zoom in 1975!)

Anyway, thank you for your health and investing advice. – S.A.

Keep sending your questions, comments, and suggestions our way. We read every e-mail... feedback@healthandwealthbulletin.com.

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