Who's Right: Institutions or Individual Investors?

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Two metrics of stock market participation have deviated, and may indicate a coming bull market. Institutions, like mutual funds, pensions and endowments, are aggressively ramping up their stock buying. Meanwhile individuals are feeling more bearish. While such a phenomenon could mean nothing, it could also mean something. Here's Bloomberg reporting:

Institutions pushed equities up to 68 percent of their holdings in July, the highest level in 15 months, from 63 percent in April, a Citigroup Inc. survey showed. The ratio of bullish to bearish respondents in a survey by the American Association of Individual Investors has fallen to 0.68, the lowest level since July 2009, based on a four-week average.

The last time money managers and individuals were this far apart was at the beginning of 2009, before the Standard & Poor's 500 Index began its 63 percent rally, according to data compiled by Bloomberg.

Read the full story at Bloomberg.

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Daniel Indiviglio was an associate editor at The Atlantic from 2009 through 2011. He is now the Washington, D.C.-based columnist for Reuters Breakingviews. He is also a 2011 Robert Novak Journalism Fellow through the Phillips Foundation. More

Indiviglio has also written for Forbes. Prior to becoming a journalist, he spent several years working as an investment banker and a consultant.
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