Waiting for FOMO Indicator

There is still a lot of cash on the sidelines.    I know of people who went to all cash prior to the election.  They felt the market would react negatively to whomever was elected   I  know people who went to all cash right after the election, fearing the ramifications of who actually got elected.   Some of these people are probably still in all cash.

They are patiently waiting for the crash they are expecting.  They believe there will be a better time in the future to reinvest.   Maybe they are right.

And maybe the market will just keep grinding up while they continue to predict a near term significant decline.   At some point, the FOMO (Fear Of Missing Out) factor will cause them to reinvest some funds.   Eventually, they will capitulate and put their maximum back into stocks.   Exuberance will return and then the market will crash.

I don't think we are anywhere near FOMO or exuberance.  So no worries yet.   If the market should grind up 20-30%, I expect people with mostly cash will start getting back into the market.  Then I will be looking for a top and correction.   But I think that is still a ways off.

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This is not financial advice. Please consult a professional advisor.

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