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The balance of sentiment among investors has officially gone bearish, according to the American Association of Individual Investors’ weekly poll, despite stocks being just points away from new all-time highs:
Anyone Who Says ‘This Time Is Different’ Is Usually Wrong (David Leonhardt)
Stocks have only seen these kinds of valuations two other times: in the run-up to the 1929 crash, and before the 2007 crash. Some say this time is different. And it’s unlikely we’ll see a comparable reckoning to those two moments. But the odds that we’ll emerge totally unscathed seem unlikely. “You can always think of reasons of why now is different,” Yale Nobel laureate Robert Shiller tells the New York Times’ David Leonhardt, who also quotes this from Harvard’s John Campbell: “One should be sceptical of ‘This time is different’ arguments.”
In a 2012 study, just 14% of 25,000 Americans surveyed were able to answer basic questions about interest rates, mortgages, bonds, inflation, and risk-taking. Researchers at the University of Arizona are trying to fix that. “The hope is that the study’s long-term results will help financial educators learn more about what causes people to spend, save, take on debt, rely on payday loans, or buy homes they cannot afford. ‘If we look at how these behaviours are formed, we have a better chance of intercepting them,’ says Joyce Serido, one of the study’s primary researchers and an assistant professor at the University of Arizona.”
Study: Sell-Side Researchers No Better Than Its Dubious Counterparts (Bloomberg View)
Jonathan Weil catches this study showing sell-side research analysts performed no better than paid research outfits, which Weil says often have a less than stellar reputation. “The authors studied a sample of 247 stock-research reports that were paid for by the companies being written about. They found the reports were just as reliable as comparable analyst reports issued by conventional brokerages. That’s saying something, considering the reputation of paid-for research shops as hired guns, hype artists and pump-and-dump promoters.”
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