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Confidence Peaks and Troughs Thumbnail

Confidence Peaks and Troughs

I’m calling it a holiday week and am keeping this one super short. Possibly the shortest I have ever written.  Here goes.


This data comes from JPMorgan.


I’m looking specifically at the return of the S&P500 over the subsequent 12 months.


From the 8 confidence peaks the average return was 4.1%.


From the 8 confidence troughs the average return was 24.9%.


The confidence data refers to the University of Michigan Consumer Sentiment Index.


Please do NOT confuse this with me saying to try and time the market. It doesn’t work.


There are two primary points I am stressing here.


First, discipline matters. You know, staying invested when things get scary.


Next, maybe there is something to that old Warren Buffett adage of being greedy when others are fearful.


That’s it.


In the words of Ferris Bueller – “You’re still here? It’s over. Go home.”

I’m Dan Johnson, CFP®, founder of Forward Thinking Wealth Management. I run a flat-fee financial planning and investment management firm located in beautiful Akron, OH. Although I am in Akron, OH, I work with clients regardless of location. I cater to owners of equity compensation positions who are looking to organize their financial lives, keep more of what they make, and do the things they want in retirement and even now.