Friday, December 26, 2008

Evidence The Media Is A Contrary Indicator

Often times market strategists note the media's take on the market can be viewed as a contrary indicator. When the magazine covers finally note that investors should sell, the markets are generally down substantially. Conversely, when the television and print media note the markets are likely to move higher, the markets have already moved higher. From time to time I write about individual investor sentiment. Investors tend to become the least bullish at market bottoms and the most bullish at the top of a market.

An example of the media as a contrary indicator is noted at Todd Sullivan's ValuePlays website. Todd provides several video reviews of Jim Cramer's market calls and history will enable investors to judge the outcome of these calls.

In the end, investors need to remember that going against the crowd can generally be a positive factor to consider when committing money to the market or withdrawing money from the market. Sticking to a disciplined investing approach is crucial at market turning points.

1 comment :

Bill M said...

That is so true. Jim Cramer has an agenda and anyone that usually tries to follow him gets burned. I watch only for the Entertainment.