Retail investors are returning to the stock market, and some financial commentators say that's a sign that equities are headed for trouble.

The thinking is that individual investors get enthusiastic about the market just when it's too late.

The American Association of Individual Investors (AAII) weekly sentiment survey appears to back up that thinking.

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After weeks in which the percentage of AAII members who were bullish minus the percentage who were bearish totaled at least 38 percent, the Standard & Poor's 500 Index on average fell 1.4 percent during the next six months, writes Joe Light of The Wall Street Journal.

In weeks when the percentage of those who were bearish minus those who were bullish was at least 31 percent, the S&P 500 rose 11 percent on average in the next six months.

Still, Malcolm Baker, a professor at Harvard Business School, says you shouldn't bet the farm on that indicator. He tells Light that in the case of very bullish sentiment, investors should only cut their stock allocation by 5 percentage points below normal.

"None of these indicators are going to predict the market in a very reliable way," Baker notes.

In 2013, U.S. stock mutual funds and exchange-traded funds saw an inflow of $172 billion, the highest amount since 1992, according Lipper.

Some market participants say retail investors' renewed interest in stocks is a good thing for the market, signifying more demand.

"This re-engagement by individual investors, we believe, is a positive and is naturally supportive of improving valuations and liquidity for stocks," Tom Lee, chief U.S. equity strategist at JPMorgan Chase, writes in a commentary obtained by Business Insider.

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