U.S. investment advisers were more optimistic about the outlook for stocks last week, possibly an unfavorable sign for contrarian investors who bet against conventional wisdom rather than with it.
A survey of 140 advisers by the Investors Intelligence newsletter found the percentage who said they were bullish about the prospects for stocks, soared to 44.5 percent from 36.1 percent the week before.
The change in investor sentiment coincided with a 1.4 percent advance in the Dow Jones Industrial Average last week. The Dow industrials on May 6 climbed to a record close of 7225.32. That was surpassed on Monday this week, when the Dow reached 7292.75. The market closed the week at 7,194.67.
Some 33 percent of investors surveyed last week described themselves as pessimistic about the outlook for share prices, down from 39 percent the week before.
The percentage who said they foresee a “correction,” or a drop in prices of about 10 percent during a 12-month period, fell to 22.7 percent from 24.6 percent.
As a result, the combined percentage of advisers who are either outright bearish or expect a correction in prices slid to 55.5 percent from 63.9 percent.
Some investors see rising optimism as a poor sign for share prices. They reason that most optimists have finished buying, leaving few to drive prices higher.
Exclusion reading plentiful
If you plan to sell a house, and you’re considering whether to claim the one-time exclusion or simply roll over the proceeds, talk with a qualified tax professional first, because the rules are simply too complicated.
To read more about these issues, get a copy of Kevin McCormally’s book, “Kiplinger’s Cut Your Taxes,” available in bookstores.
Also, ask the IRS for a copy of Publication 17 as well as Publication 523, “Selling Your Home,” and Form 2119, “Sale of Your Home,” by calling the IRS at 1-800-829-3676, or by completing the order form in your tax package.
If you have access to a computer, you can read more at the IRS’s World Wide Web site at this Internet address: http://www.irs.ustreas.gov