With Investors Turning Bearish, Stocks Could Jump 14%

Individual investors are scared right now. But as contrarians, we see this crash in sentiment as an opportunity... [Stansberry Research Logo] Delivering World-Class Financial Research Since 1999 [DailyWealth] With Investors Turning Bearish, Stocks Could Jump 14% By Brett Eversole --------------------------------------------------------------- Most mom-and-pop investors are a fickle bunch... They get bullish during the good times... but quickly turn bearish when times get tough. Their attitude toward stocks doesn't come from deep research or tried-and-true investment philosophies. Instead, most of these folks tend to let emotions guide their investing decisions. They react all too predictably to market fluctuations. So you can get a good idea of how they feel just by looking at what stocks did over the past month. The S&P 500 Index has dropped 5% since early February. And sure enough, mom-and-pop investors turned bearish at one of the fastest rates on record. The good news is, similar sentiment crashes have been a strong sign for stocks going forward. And that means we could see double-digit gains over the next year. Let me explain... --------------------------------------------------------------- Recommended Links: [Bank Collapse Warning You Can't Afford to Miss]( A powerful indicator just triggered that has only appeared a handful of times since 1950 – and every time, it has predicted the stock market's next move with a 100% success rate. One Wall Street insider sounded the alarm... and explained why ignoring this signal could spell disaster for your money in 2023. [Click here to tune in now (includes a free recommendation)](. --------------------------------------------------------------- [The No. 1 Gold Play for 2023]( Some of the richest men in the world are jumping into gold right now... because evidence suggests we could see MUCH HIGHER prices in the coming weeks. But if you're not taking advantage of a little-known way to invest for around $5 today, you're missing out. [Click here for full details](. --------------------------------------------------------------- I covered a big change in investor sentiment [last month](. It came from the American Association of Individual Investors ("AAII"). The AAII sends out a weekly survey to mom-and-pop investors. It asks if they're bullish, bearish, or neutral on stocks over the next six months. From those results, you can build the "bull ratio." That's just the total number of bulls, divided by the number of bulls plus bears. (Basically, it removes the neutral responses to create a simple ratio.) A bull ratio of 100 is as bullish as possible. And a ratio of 0 is totally bearish. The bull ratio peaked in February with a reading of 60. It was the first time there were more bulls than bears since the bear market began in 2022. Things reversed quickly, though. The bulls fled in recent weeks as the market fell and fear took over. And during the worst of the banking-sector turmoil, the bull ratio dropped to about 28. That's already darn low on its own. But even more remarkable is just how quickly we got there... And that alarming speed is what makes this massive drop worth a closer look. In just five weeks, the bull ratio fell 32 percentage points. That's the largest five-week drop we've seen at any point over the past decade. Take a look... The last time we saw a bigger five-week decline was all the way back in 2006. In fact, the bull ratio has only dropped faster 12 times since 1990. So, the recent bullish-to-bearish swing is rare. And it means this is likely a good time to bet against the crowd. You see, similar setups have led to fantastic gains over the following year. Take a look... Stocks are an obvious long-term winner for investors. Since 1990, the typical annual gain has been 7.7%. But by buying in at times like these, you can nearly double those returns... Similar setups have led to 3.4% gains in three months, 9.2% gains in six months, and 14.4% gains over the next year. Even better, stocks were higher a year later 92% of the time. Individual investors are scared right now. They're reeling from the one-two punch of a banking crisis and a slumping stock market. But as contrarians, we see this sentiment switch as an opportunity. History shows fantastic gains tend to follow reversals like today's. That's why you want to start buying once the trend moves in your favor. Good investing, Brett Eversole Further Reading "Most folks will tell you individual investors are fighting an uphill battle," Brett says. Compared to the big money on Wall Street, it may seem impossible to get ahead. But with a contrarian mindset, you can give yourself one critically important edge... [Learn more here](. Mom-and-pop investors are worried today – and they aren't the only ones. Even professional investors are fleeing to the safety of cash. That's because cash acted as critical portfolio protection last year. But this year, hiding in cash isn't likely to pay off... [Read more here](. --------------------------------------------------------------- [Tell us what you think of this content]( [We value our subscribers' feedback. To help us improve your experience, we'd like to ask you a couple brief questions.]( [Click here to rate this e-mail]( You have received this e-mail as part of your subscription to DailyWealth. If you no longer want to receive e-mails from DailyWealth [click here](. Published by Stansberry Research. You're receiving this e-mail at {EMAIL}. Stansberry Research welcomes comments or suggestions at feedback@stansberryresearch.com. This address is for feedback only. For questions about your account or to speak with customer service, call 888-261-2693 (U.S.) or 443-839-0986 (international) Monday-Friday, 9 a.m.-5 p.m. Eastern time. 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