Dorsey, Wright Client Sentiment Survey - 4/27/12

April 27, 2012

Here we have the next round of the Dorsey, Wright Sentiment Survey, the first third-party sentiment poll. Participate to learn more about our Dorsey, Wright Polo Shirt raffle! Just follow the instructions after taking the poll, and we’ll enter you in the contest. Thanks to all our participants from last round.

As you know, when individuals self-report, they are always taller and more beautiful than when outside observers report their perceptions! Instead of asking individual investors to self-report whether they are bullish or bearish, we’d like financial advisors to weigh in and report on the actual behavior of clients. It’s two simple questions and will take no more than 20 seconds of your time. We’ll construct indicators from the data and report the results regularly on our blog–but we need your help to get a large statistical sample!

Click here to take Dorsey, Wright’s Client Sentiment Survey.

Contribute to the greater good! It’s painless, we promise.

Leave a Comment » | Investor Behavior, Markets, Sentiment | Permalink

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Wrong Way Corrigans

April 27, 2012

Professionals are no good at forecasting the market, something that numerous studies have made clear. CXO Advisory shows that bloggers are no better. This isn’t really a surprise, but I like their graphic that shows when bloggers are most bullish, the market performs most poorly—and vice versa. (Unlike Douglas Corrigan, bloggers probably aren’t going the wrong way on purpose.)

blogger sentiment quintile Wrong Way Corrigans

Source: CXO Advisory (click on image to enlarge)

This is a good bit of what makes financial markets so frustrating for the retail investor. Just when they are feeling most bullish…wham! Then, they watch helplessly as the market rises, paralyzed by fear and unable to bring themselves to participate. (This has been going on for three years now, if you’re paying attention to the Funds Flow report.)

Advisors often complain about the amount of hand-holding they need to do during adverse market conditions, but this may be their most critical function. If investors want a chance at the returns, they have no alternative but to get in the game. For may investors, guidance from a trusted advisor could be the difference between success and failure.

Leave a Comment » | Markets, Sentiment, Thought Process | Permalink

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Why Countries Succeed and Fail

April 27, 2012

Ray Dalio of Bridgewater is an interesting character and an independent thinker. He’s also been immensely successful as an investor. If you are interested in economic history and think it might have some relevance to the way things might evolve in the future, you’ll want to read his paper on why countries succeed and fail.

This is also a wake-up call that you need to consider a flexible, global investment policy. You need to go where the returns are, and that can change from cycle to cycle.

Leave a Comment » | Markets, Tactical Asset Alloc, Thought Process | Permalink

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Sector and Capitalization Performance

April 27, 2012

The chart below shows performance of US sectors and capitalizations over the trailing 12, 6, and 1 month(s). Performance updated through 4/26/2012.

Leave a Comment » | Markets | Permalink

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