Tags: Hulbert | market | timers | stock

Hulbert: Short-Term Market Timers Are Bearish, So You Should Be Bullish

By    |   Monday, 21 April 2014 08:41 AM

Short-term, market-timing newsletters have turned bearish on stocks, which means it's a good time for investors to be bullish, says Mark Hulbert, editor of the Hulbert Financial Digest.

"That may seem like a backward way of looking at things," he writes in The Wall Street Journal. "But share prices have shown a striking tendency to do the opposite of what . . . [the market timers] think the market is about to do."

When the stock market reached record highs in early March, a group of 42 market timers recommended on average that clients put 66 percent of their equity-oriented investments in stocks and the rest in cash, Hulbert says.

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Now the market timers on average recommend allocating only 38 percent of equity portfolios to stocks, he notes.

"The problem is that in the three decades in which the Hulbert Financial Digest has tracked the consensus sentiment of short-term market timers, similar plunges in their recommended allocations to stocks have been followed by 2 percent gains in share prices over the subsequent three months, on average."

The S&P 500 advanced 2.7 percent last week, its best showing since July.

"There is an intense focus on earnings and how well companies were executing in a challenging first-quarter environment," Alan Gayle, a senior strategist at RidgeWorth Capital Management, tells Bloomberg.

"The macro environment is expected to improve and it does look like the numbers are moving in that direction."

Editor’s Note: Get These 4 Stocks Before 399% Stock Market Rally!

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InvestingAnalysis
Short-term, market-timing newsletters have turned bearish on stocks, which means it's a good time for investors to be bullish, says Mark Hulbert, editor of the Hulbert Financial Digest.
Hulbert, market, timers, stock
261
2014-41-21
Monday, 21 April 2014 08:41 AM
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