Stock Market Euphoria Is Off The Charts

The Panic/Euphoria Index shows that investors are more euphoric today than they have been in decades.

What would John Templeton say? He would advise us to be cautious and to reduce our stock market holdings to a moderate amount of our portfolios. He would tell us to expect the mood of investors to change over the next few months as reality set in. He would suggest that we expect stock prices to go sideways at best over the intermediate-term. We agree.

Thanks for your confidence in us at Generations Wealth Planning.

Video Transcript:

Greetings from sunny Sarasota, Florida, where Spring has arrived and the activity level seems to be picking up somewhat. We hope all is well with you and your loved ones.

Some of you are probably familiar with a man named John Templeton, who started the Templeton Funds. Along with Warren Buffet, he is considered one of the most successful investors of all time. He lived well into his 90s and saw many cycles in the stock markets around the world, many ups and downs. He once said this about bull markets, times like today, when stock prices go up significantly. "Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria."

What is the general mood of investors today? Using the Panic/Euphoria Index, it shows that investors have gone from panicky last March to a maximum level of euphoria. Investors today are more euphoric than they have been in decades.

What would John Templeton say? He would advise us to be cautious and to reduce our stock market holdings to a moderate amount of our portfolios. He would tell us to expect the mood of investors to change over the next few months as reality sets in. He would suggest that we expect stock prices to go sideways, at best, over the intermediate term.

We agree.

So, our model portfolios are positioned somewhat defensively and we will be watching closely. Please let us know if you have any questions or comments, and as always, thank you for your confidence in us here at Generations Wealth Planning. See you soon.