A Spike Higher In Bullish Investor Sentiment

Thursday the American Association of Individual Investors reported results of their Sentiment Survey for the week ending 12/13/2017. The report shows individual investor bullish sentiment jumped 8.1 percentage points to 45.0%.
Most of the jump in bullish sentiment was a result of a 6.1 percentage point decline in bearish sentiment. This has resulted in the bull/bear spread widening to 16.9%, the third widest spread in 2017.

As I have noted in prior sentiment updates, the survey results can be volatile and the 8-period moving average removes the weekly volatility. Additionally, the sentiment measures are contrarian ones and are most useful when they are at their extremes. The current report is not at an extreme level; however, it is elevated and worth paying attention to as the market continues to move higher and exhibit a low level of volatility.

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HORAN Capital Advisors is an SEC registered investment advisor that manages investment portfolios for individuals and institutions. Our firm utilizes a disciplined investing approach that should create wealth for our clients over time. Our investment bias is to invest in companies that generate a steady return over time, i.e., singles and doubles. This singles and doubles approach tends to lead to investments in higher quality dividend growth/cash flow growth companies. On the other hand, there are times when a company's stock price seems to be trading below its fair valuation. Short term gains are possible in these situations. I have been managing investment portfolios for individuals and institutions for over fifteen years and believe investing is like running a marathon and not a sprint. Taking the road less traveled, more often than not, leads to higher returns. Visit: The Blog of HORAN Capital Advisors at (https://horanassoc.com/insights/market-commentary-blog)
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