Announcer:
4 Your Money is brought to you by NelsonCorp Wealth Management.
Brandy Auterson-Hurst:
It’s now time for 4 Your Money. We’re joined by David Nelson, CEO of NelsonCorp Wealth Management. Welcome back, David.
David Nelson:
Thank you. Excited to be here.
Brandy Auterson-Hurst:
So Wall Street analysts put out buy and sell recommendations all the time. So how do you think about this data?
David Nelson:
Yeah. I brought along a chart today. I guess we’ll put it up. It’s going to make people stop and think a little bit, I hope. And what you’ll see here as far as on the chart is it’s tracking what you brought up, and that is Wall Street analyst recommendations that are rated buys. And here’s why we find it very interesting, is back in February of 2022, the buy percentage hit a record high, 57% was the level. That’s the highest it’s been since 2010. Now, in other words, the analysts were very bullish on the stock market then. That was February 2022. Now, as people may or may not remember, 2022 turned out to be the worst year that the S&P has had since 2008 with stocks falling 18%. So fast-forward to February of ’23, and what you’ll see there is the buy percentage is at 52%.
That’s just before we see that the market takes off. The S&P took off three consecutive years, going up 26%, 25%, and 18% respectively. So it brings us to today, and the buy percentage now has climbed to 58%, a brand new record going back to 2010.
Brandy Auterson-Hurst:
Okay. So what should viewers make of that?
David Nelson:
I’d be a little nervous, but I guess the conclusion is that when Wall Street recommendations all come pretty much in unison and we have these high percentages, the history book says that that’s a time to worry and make sure that your portfolio is protected.
Brandy Auterson-Hurst:
All right, David, thanks for your insight today.
Past performance is no guarantee of future results. Investing involves risk. Depending on the types of investments, there may be varying degrees of risk. Investors should be prepared to bear loss, including total loss of principal.
Indices mentioned are unmanaged and cannot be invested into directly.
This video includes a paid appearance.