Whatâs going on here? Investors have got the jitters about stock markets right now. What does this mean? Letâs face it: thereâs not much to feel optimistic about these days. Inflationâs gone nowhere, interest rates are squeezing the already sluggish economy, and a wobbly banking sectorâs threatening to bring the whole house of cards tumbling down. Itâs no wonder, then, that investors are shying away from stocks. Data from S&P Global Market Intelligence shows that, in the past year, institutional investors have sold $330 billion more in stocks than theyâve bought, while retail investors yanked out $28 billion. Follow that money, and its trail seems to lead to safer investments with decent returns â like money markets, which ballooned to a record-breaking $5.3 trillion in assets last week. Why should I care? For markets: Opposing opportunity. The situation might look bleak, but some pundits think the gloomâs hiding a tempting opportunity. These folk see the marketsâ pessimism as a âcontrarian indicatorâ, a sign to zig when others zag â like Buffettâs famous âbe greedy when others are fearfulâ mantra. See, with a mountain of cash on the sidelines, thereâs less room for money to be pulled, which could limit losses. Plus, the slightest glimmer of good news might tempt folk to pour cash back into markets, lifting share prices once again. For you personally: Tread carefully. Before you dive headfirst back into stocks, remember that there are still plenty of risks out there â and indicators like these might be jumping the gun on calling a rally. If you are planning to put some cash to work, though, stay disciplined, think long-term, and brace for potential turbulence. Thatâs doubly true for anyone picking individual stocks, with even professional active fund managers struggling: after all, only about a third of them managed to outperform their benchmarks â usually big indexes like the S&P 500 â last quarter. |