Investor Sentiment Measures Nearing Elevated Level

2026-01-19 10:55:00 ET

Investors in stocks have enjoyed favorable returns across many asset classes over the last three years. The S&P 500 Index's 3-year annualized total return as of December 31, 2025, is over 23%, meaning an investor earned, on average, 23% in each year of the last three years. A number of other asset classes have generated similar results , or at least double-digit returns, over this same three-year time period. These strong results have led to investor sentiment moving higher and entering overly bullish sentiment levels. Investor sentiment measures are contrarian ones, and when sentiment becomes overly bullish, the market could be setting itself up for a pullback....

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