Bearish market sentiment is at a five-year high, so should you be feeling the same?
Look at the previous peaks on this graph: Short Interest near five year high
The US Treasury bond downgrade in August 2011…The Euro zone crisis in ’12…Last week’s and last summer’s Shanghai Composite Index selloffs.
Market sentiment is usually considered as a contrarian indicator, a good thing to bet against, especially when it is more extreme. Very bearish sentiment is usually followed by the market going up more than normal. Buying low-cost, broad-based, index funds when they are on sale is an easy way to get rich.