Investors’ Opinions of S&P 500 Hitting New High Are Split

This week’s Sentiment Survey special question asked AAII members what their thoughts were regarding the S&P 500 index reaching a new record high. Opinions on the new highs are overwhelmingly split, with approximately 43% of respondents viewing the new highs as unsustainable and due for a correction. Some respondents in this group believe that the record-breaking highs are a sign of the tail end of the bull run. On the other hand, 38% of respondents say that the S&P 500 highs are appropriate given current interest rates and limited investment opportunities outside of equities. A majority of this group also state that they believe the S&P 500 will continue to rise well into 2020. Additionally, 11% of respondents say the new highs are in response to developing trade resolution talks and 8% state that they have no opinion on the matter.

Here is a sampling of the responses: 

• “The economy is strong, and stockholders are optimistic. The yield on bonds is low limiting investment options.”
• “False sense of security despite highly volatile geopolitical/economic conditions.”
• “I have no thoughts. This is just another number. As long as corporations continue to spend the money to buy back their stocks, earnings will continue to be supported by fewer shares traded.”
• “No other place to put money to get a decent return, so equities are the best. Even though the markets are high, one wonders how long equities can go without overpricing.”
• “The S&P 500 has achieved record highs over the last week. History suggests that that might reverse soon.”

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