“Smart Money” Emotionally Invests Too

by | Jun 30, 2014 | Asset Management, Videos

We recently read a post on the Wall Street Journal about big investors who have missed out on the stock market rally of the last five years.

The article talked about endowments from colleges and universities and corporate pension plans. Ten years ago the average college endowment fund had 32% invested in the stock market. By the end of 2008, that number had fallen to 23%. In 2013, they had just 16% of their assets in the stocks. Likewise, pension plans had 61% invested in stocks in 2004. In 2013, that number had fallen to just 43%.

We took two main things away from this article and its statistics. There might be more money on the sidelines still, which could lead to gains down the road. We can’t be certain of that. Another point is that even the big guys, commonly referred to as the “smart money”, make emotional decisions when it comes to investing. They’ve now missed out on five pretty good years for the stock market because of their emotional decisions.

Here at Mullooly Asset Management we manage money using point and figure charts. These charts are emotionless. They show us the two most important things, supply and demand.

Check out that article from the Wall Street Journal here: http://online.wsj.com/articles/big-investors-missed-stock-rally-1403567478

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