With the Dow and Nasdaq recently hitting new all-time highs, another year 2000 stock market crash indicator just flashed red.
Shades Of 2000 For Mom And Pop
November 28 (King World News) – Here is a small portion of a cautionary note that was issued by Jason Goepfert at SentimenTrader:
Bottom Line
- Individual investors haven’t had this small of a cash cushion since 2000
- At the same time, they are heavily allocated to stocks
- The difference between their stock and cash allocations is among the widest in 30 years
The latest monthly allocation survey from the American Association of Individual Investors showed that mom and pop continue to add to stocks and avoid cash…
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The percentage of their portfolio dedicated to stocks rose to 68.6%. They also increased their allocation to bonds. As a result, their cash holdings fell to 13.9%, the lowest since January 2000.
The chart below shows their allocation to stocks minus cash.
We can see that while it got close to the current level in 2015 before the correction, and several times from 2004 – 2007, also preceding medium-term pullbacks, it hasn’t been at the current level since 2000. There was a window from late 1997 through 2000 when it routinely got this extreme.
The chart and commentary above are from SentimenTrader. To try a free 14-day trial of the internationally acclaimed work that Jason Goepfert produces at SentimenTrader simply CLICK HERE.
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