Almost half of those responding (47 percent) to a survey last week by the American Association of Individual Investors said the recent record highs on Wall Street are giving them a negative outlook on the stock market. “Valuations are a key reason why,” the AAII said in a blog post announcing the findings.
Some of those queries indicated they are deliberately drumming up cash or holding off on any new stock purchases until the froth burns off. Said one respondent: “Stocks are getting very expensive based on relative measures and suggest a cautious approach until a cleansing correction occurs.”
On the other hand, the new record highs justify an optimistic perspective according to 28 percent of those surveyed, the association continued. One participant put it this way: “The market is in an uptrend and making new highs, which makes me bullish.”
Meanwhile, almost 20 percent of the members who responded indicated their outlook has not been swayed by the continued big run-up in market valuations. “Many of these respondents described themselves as taking a long-term view of the market,” said the AAII. One member told the organization: “I stay fully invested at all times, so I’m a happy camper.”
Elsewhere in markets, precious metals finished the week ending Friday somewhat lower for the second consecutive week. Gold finished the week off 1.7 percent, and silver dipped twice as much, closing 3.4 percent lower.
Precious metals are caught in choppy waters, with rising military tensions on the Korean Peninsula pushing gold higher, with monetary policy concerns from the US Federal Reserve having a dampening effect. Some observers expect to see the yellow metal remain under pressure this week, while others expect that the continued high-stakes standoff between the US and North Korean governments will push gold higher in safe haven trading.