Investor Psychology: US Investors are Thrilled

Investor psychology follows a very distinct cycle of optimism – to euphoria – to fear – to despondency and back to optimism. The stock market is one of the only market places where buyers are sparse when things go on sale and becomes crowded as things get more expensive, as it is today. We are seeing complacency in US investors at a time when a few indicators are showing that US large companies are at all time historic highs (even higher than 1929 and 1999). This indicates that risk in US stocks is high and other asset classes offer a better risk/return profile.