The Stock Market Just Flashed a Warning Signal That’s Been Right 83% of the Time Since 1960. Here’s My Plan.
Investors are borrowing heavily against their portfolios to boost their returns. Over the past year, margin debt has increased by 49%. That’s a bad omen. According to Fundstrat Global Advisors, whenever margin debt has grown more than 45% year-over-year since 1960, the market has declined five out of six times (83%). That’s a signal worth watching.