Last week, when the Dow exceeded its previous record high from January 2000, we compared various traits of the market now versus then.
One area we looked at was sentiment. What we found was that each survey of consumer and investor sentiment that we track is lower now than it was then.
In the chart below, we created a composite index of investor and consumer sentiment, and compared it to the Dow. From January 2000 through early 2003, the two tracked each other very closely. However, since then, even though stocks have continued to climb, sentiment has declined.