History Says the Stock Market Is About to Soar: 2 Brilliant AI Stocks to Buy Now
The S&P 500 (SNPINDEX: ^GSPC) has advanced 2% year to date, but history says the index is headed much higher in the next year. A survey from the American Association of Individual Investors showed 61.9% of respondents were bearish during the week ended April 3, which means they expected the market to decline over the next six months.Bearish sentiment has only topped 60% in eight weekly surveys since 1987. In this case, the tariffs imposed by the Trump administration were responsible for the widespread pessimism, but all previous incidents have something in common: Stocks were always much higher a year later.In fact, the S&P 500 has returned an average of 27% in the 12 months after bearish sentiment readings above 60%. That may sound counterintuitive, but extreme pessimism is typically a contrarian signal because most situations are less dire than they first appear. In this scenario, the S&P 500 closed at 5,397 on April 3. If its performance matches the historical average, the index will advanced 27% to 6,854 by next April.Continue reading
The S&P 500 (SNPINDEX: ^GSPC) has advanced 2% year to date, but history says the index is headed much higher in the next year. A survey from the American Association of Individual Investors showed 61.9% of respondents were bearish during the week ended April 3, which means they expected the market to decline over the next six months.
Bearish sentiment has only topped 60% in eight weekly surveys since 1987. In this case, the tariffs imposed by the Trump administration were responsible for the widespread pessimism, but all previous incidents have something in common: Stocks were always much higher a year later.
In fact, the S&P 500 has returned an average of 27% in the 12 months after bearish sentiment readings above 60%. That may sound counterintuitive, but extreme pessimism is typically a contrarian signal because most situations are less dire than they first appear. In this scenario, the S&P 500 closed at 5,397 on April 3. If its performance matches the historical average, the index will advanced 27% to 6,854 by next April.
