Amateurs Buy up as Pros Run Scared
Vanguard just leaked its big data. This is the Wall Street titan that assembles passive investment funds that run into the hundreds of billions of dollars, and now, it says it has evidence of a major trend reversal in this bear market. ‘This time it’s different!’
Mom-and-pop stock investors are buying, and professional money managers are selling. Think about that. It’s usually the opposite way around amid market sell-offs.
“This has never been true before, and it’s a very unique aspect of this downturn,” according to Jeff Kleintop, the chief global strategist at Charles Schwab. Vanguard insists the math checks out. Amateur investors are “maintaining a long-term perspective,” while the “pros” are losing their rag. They’ve lost their level heads, and they’re hitting the sell button.
There are various theories. One is that the old bull market may still be alive under the surface, down but not out. After all, pandemics are temporary. Everyone knows that. Another theory is that the powerful and well-connected know something we don’t. And yet another theory is that Vanguard is making all this up. The asset managed needs to get folks back into the market and into its funds. It’s up to you to decide.
The Invstr community never sleeps, only swapping long bets for the short, and hyper-growth stocks for the recession-proof. The smart money has always gone in the opposite direction to where amateur consensus says it should go. But with data like this not being recorded for twenty years, the community will need to think hard about the signals this time!