Financial advisors have turned decidedly more optimistic about the market’s prospects for 2012, according to an SEI Quick Poll released Thursday. Nine in 10 of the advisors surveyed in early February said they expect a positive return for the S&P 500 in 2012, up 18% from a similar survey conducted in mid-January. More than six in 10, 63%, predicted gains greater than 5%, a sentiment that spread dramatically from just three weeks ago.
... The survey brimmed with additional evidence of growing optimism in the market. More than one in four advisors predicted that the “pessimism bubble” hovering over the economy will burst in 2012. Nearly one-third said that investor sentiment can best be described by the phrase, “the tide is turning.”
This level of bullishness does not necessarily mean we are at a top. But the best returns come from investing when everybody is bearish, such as late this Summer and Fall. That is the time to be aggressive.