The Investment Pros Are Fleeing Stocks... Here's What It Means

It's crazy how quickly even the investment "pros" have thrown in the towel on the stock market. Sentiment has collapsed. Today, we'll look at what to expect based on history... [Stansberry Research Logo] Delivering World-Class Financial Research Since 1999 [DailyWealth] The Investment Pros Are Fleeing Stocks... Here's What It Means By Brett Eversole --------------------------------------------------------------- New bull markets always play out the same way... Investors are lukewarm at first. But as prices keep rising, they eventually get excited. This isn't the same kind of excitement you see late in a bull market, though. It isn't folks throwing caution to the wind. Instead, that positive sentiment will quickly reverse at any sign of market weakness. Folks saw that weakness in August. It was the S&P 500's first month of losses since February. And it brought back painful memories of multiple losing months in 2022. Even professional investors bailed on stocks. That's nothing to worry about, though. Again, it's what we'd expect to see early in a bull market... And according to history, this latest reversal could lead to 29% gains over the next two years. Let me explain... --------------------------------------------------------------- Recommended Links: ['This Is the Biggest Warning of My Career']( Ten of the world's biggest money managers depend on Joel Litman's market analysis. On September 27, he's stepping forward to give you the same (frightening) market warning he just shared with them... And he'll also reveal a tool he has been waiting 20 years to share with the public. If you're holding stocks, you need to see this. [Click here to learn more](. --------------------------------------------------------------- [The Top Five AI Stocks to Buy in 2023]( Investors are getting very rich in artificial-intelligence stocks right now. And according to 50-year Wall Street veteran Marc Chaikin, there are FIVE AI companies Wall Street is buying hand over fist that need to be on your radar immediately. [Click here for the names and tickers](. --------------------------------------------------------------- It's crazy how quickly even the investment "pros" have thrown in the towel on the stock market... [Just a month ago]( we looked at the National Association of Active Investment Managers ("NAAIM") Exposure Index. It showed that these money managers were getting excited about the market. Today, it's the complete opposite. As a reminder, the NAAIM is a nonprofit organization that has brought active investment managers together since 1989. That includes polling its members weekly to find out how bullish they are on the markets. It builds the results into the NAAIM Exposure Index. And like most sentiment gauges, it's a useful contrarian indicator. This measure showed that the pros were getting darn bullish in late July. The index hit a multiyear high that month. But it has collapsed since. Take a look... The exposure index hit 102 in late July. Just four weeks later, it fell to 34. And what made that decline extreme was the pace and severity of the drop. Specifically, this index plummeted by a massive 66% in just four weeks. That's one of the largest four-week declines we've seen over the past 15 years. Heck, we've only seen six drops of this size or greater over that period. The good news is that this kind of rapid decline in sentiment is a great opportunity to buy... not just for a few months, but for a few years. Here's what happened after similar instances since 2008... The last decade and a half has been great for stock investors. The S&P 500 was up 9% a year over that time. But you're in for a treat if you buy after this kind of sentiment collapse... Similar setups led to 5.8% gains over six months, 17% gains over a year, and 29.4% gains over two years. That's major outperformance in all three time frames. This isn't just a short-term buying opportunity, but a long-term one. Even more, stocks were up 100% of the time a year later... and even two years later. So buying today isn't a risky bet. The odds are firmly in our favor, based on 15 years of history. This also proves that we're in the early stages of a new bull market. Stocks have barely dropped... yet sentiment has collapsed. It might seem odd at first, but that's an incredibly bullish setup. And it's why we want to have money in the markets right now. Good investing, Brett Eversole Further Reading "It's the old saying in action – that stocks climb a Wall of Worry," Brett says. We're seeing this now. After last month's pullback, investors are scared that a crash is looming. But this is classic behavior for a new bull market. And history shows it, too... [Read more here](. "Some folks jump out of the market at the slightest correction," Dr. David Eifrig writes. It's one of many consequences of "loss aversion." This quirk of investor psychology can be dangerous to your portfolio. But you can manage it with a few simple steps... [Learn 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.]( 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. Or e-mail info@stansberryresearch.com. 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