Over the weekend I found this graphic on http://www.advisorperspectives.com/dshort/. Look at the highs and lows of the ratio between assets allocated to equities vs. assets allocated to money markets. As the S&P 500 peaked in the year 2000 this ratio peaked at 3.09% then the bubble popped. At the S&P 500 bottom in late-2002 this ratio was down to 1.38. Just before the S&P 500 peaked in late-2007 this ratio hit 3.39. In 2009 after the S&P 500 bottomed the ratio slumped to 1.18. Today the ratio is at an all time high at 3.49, which is another fundamental warning of significant risk in the stock market.
At the time of publication the author held no positions in any of the stocks mentioned.Follow @Suttmeier This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV