The sentiment reading from Investors Intelligence, which is published weekly on Wednesdays, indicates today that 43.3% of investment advisors are now bearish, a very significant figure because that was the level at the last bear market bottom. That, coupled with the 3/8 retracement of the last bull market, a Fibonacci number, fulfills the two necessary conditions for a bottom mentioned in previous blogs. Accordingly, I am now investing one half of my financial assets allocated to equities. That money will go into the T. Rowe Price Standard and Poors Index Fund.
I am only investing half because past bear markets have ended with the percentage of bears rising to well over 60%. Furthermore, the deleveraging of the macroeconomic balance sheet is just beginning and may last for many more months. The period of economic malaise may prove to be longer than average.
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