Dour predictions on the demise of stocks fill the air. They remind us of one of the biggest contrarian signals of all time: a BusinessWeek cover story, “The Death of Equities” followed by a long bull market. Hearing such negative talk today should make you bullish.
The media often both reflect the times and amplify popular emotions, whether fear or euphoria. Right now, in the wake of the rising interest rates, falling stock prices, negative bond yields and ongoing unease and woes, individuals and institutions are moving away from common stocks.
Investors and journalists are almost always looking for hard-and-fast signals. However, assessing behavioral errors in the market is never scientific, and always insights about them are subject to change.