According to the Washington Service (http://www.washingtonservice.com/InsiderTrading.aspx ),corporate executives are buying less and selling more of their own company's stock at a rate not seen since 1988 (ratio of buyers to sellers).
That should give us a little insight as to what these folks think about the valuation of their company stock price.
Meanwhile, according to BlackRock, equities continue to be the most purchased group of ETP's (Exchange Traded Product) in February:
After sitting on the sidelines since 2008, retail flows into equity markets have been at full-force since the US election.
As a reminder, let's look at the emotional cycle attributed to retail investing:
Typically, retail investors enter the market in earnest when they are most confident and after 8 years of continued positive (with only minor corrections) performance, the memories of 2008 are fading fast.
The big question then is : which is the "smarter" money?
The insider / corporate executive, or the emotionally euphoric retail investor?
As I / we have been stressing lately, we see risks as high and rising and as always, believe that near-term caution is the best way of protecting our and our (High Rock) client's net worth. As our and our client's goals are all longer-term in nature, we believe that short-term prudence will carry the day.
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Scott Tomenson,CIM Managing Partner, Chief Investment Strategist