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In the past year, the stock market has been flooded by inexperienced investors.
Here s a May 12, 2020 CNBC headline:
Young investors pile into stocks, seeing generational-buying moment instead of risk
The message of that headline matches up with the sentiment among many investors that the stock market is at the
start of a boom not near an end.
Yes, financial history shows that the same psychology has been on display before, i.e., the heralding of The New Economy in 2000 just as stocks were topping. And, if you want to go all the way back to the 1929 top, the proclamation of A New Era.
Prior model extremes occurred in March 2000 and October 2007
Elliott Wave International has been providing market analysis for more than four decades which includes many bull/bear market cycles.
That said, the public s current market mindset especially among inexperienced investors is a reminder of the extremes surrounding the 2000 market top, and a few others.
For example, a February 27 MarketWatch headline said:
A new wave of fearless retail investors is ready to pour $170 billion into stocks .
Also, according to an early February Deutsche Bank survey of online brokerage users, 61% are under 34 years of age and 45% are in their first year of investing.