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U.S. Stocks: Why Acting Independently Has Never Been More Important

“Individual investors have been snapping up stocks at the fastest pace on record”

by Bob Stokes
Updated: February 28, 2023

More than 20 years ago, when I was working for another company, I remember hearing a colleague say that he doesn't look at his monthly 401k statements.

The implication was clear: He couldn't bear to see the losses. At the time, the stock market was in a big downtrend after the bust.

I was reminded of what my former colleague said when I saw this Feb. 23 CNBC headline:

Retirees lost 23% of their 401(k) savings in 2022, Fidelity says

The S&P 500 index surrendered nearly 20% in 2022. As for bonds, another CNBC headline noted (Jan. 7):

2022 was the worst-ever year for U.S. bonds.

So, no doubt, there's been a lot of pained looks on the faces of 401k participants as they've reviewed their statements during the past some months.

Even so, read this from Yahoo! News (Feb. 16):

Individual investors have been snapping up stocks at the fastest pace on record as U.S. equity markets have charged higher to start the year. Over the past month, retail investors funneled an average of $1.51 billion each day into U.S. stocks, the highest amount ever recorded.

This chart and commentary are from the February Elliott Wave Theorist:


Observe in the chart that it has taken massive retail commitment just to get the S&P to tack on a small upward leg in the opening weeks of 2023

The point is clear: Even after a substantial hit to their portfolios in 2022, Main Street investors are still optimistic about the prospects for the stock market.

Elliott Wave International believes that this is just one of many signals that investors should act independently from the crowd.

Let me conclude with this statement from a past Elliott Wave Financial Forecast:

The market fools most of the people most of the time, but the Wave Principle alerts us to the point in the middle of a major trend when the reality of the new direction is unmistakable to reasonably observant investors.

This applies now: The reality of the new direction which began in January 2022 has yet to sink in with many investors. It may not be long before it does.

Get our specific Elliott wave analysis of stocks, bonds, gold, silver, the U.S. dollar and more as you follow the link below.

“Few Are Truly Bearish … Fewer Have Actually Cashed Out”

Thats a quote from our monthly February Elliott Wave Financial Forecast, which presents even more evidence of an epic complacency among stock market investors.

Yes, FOMO (fear of missing out) is back in a big way. This, along with the stock market's Elliott wave pattern, conveys a clear message.

Get the all-important details.

You will find them as you review our near-, intermediate- and long-term forecasts for stocks, bonds, gold, silver, the U.S. dollar and more in our Financial Forecast Service (comprised of the thrice weekly U.S. Short Term Update, the monthly Elliott Wave Financial Forecast and the monthly Elliott Wave Theorist.)

Follow the link below to learn more now.

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