When Big Money Falls, It’s Time to Buy

At MAPsignals, we rely on Big Money data. And that too can be as simple or complex as you need.

When Big Money Falls, It’s Time to Buy

Following Big Money is always a good way to approach investing for me (and many others). One reason is because when Big Money falls, it’s time to buy.

Bearish worries have ruled the media headlines. Elevated interest rates, a strong dollar, and a potential reignition of inflation are frightening people.

And when Big Money falls, it’s usually a time of fear. Kind of like right now.

A simple way to gauge Big Money activity is with the MAPsignals Big Money Index (BMI). It’s a 25-day moving average of Big Money buys and sells netted. When it rises, money is entering the market. When the BMI falls, money is exiting.

As of last week, the BMI was falling, all the way to 37% – the lowest level since November:

Fear has been the rule, so Big Money has been exiting. This means more stocks are being sold than bought.

It’s a Great Time to Buy

Many leading stocks have felt the pain recently. And it’s somewhat widespread – pain can be seen in technology, real estate, staples, and more.

What does this all mean? It means it’s a great time to buy. And if you wait too long, you might miss out on a rally.

Going back to 2014, BMI readings this low tend to foreshadow market-beating returns for both large- and mid-cap stocks.

Over this period, there have been 276 days with a sub-37% BMI. In these cases, the forward returns for the market generally (as measured by the exchange-traded fund SPDR S&P 500 ETF Trust (SPY)), and mid-cap stocks specifically (as measured by the iShares Core S&P Mid-Cap ETF (IJH) , are both well above average:

That kind of market-beating performance can be had, if you’re brave enough to buy despite a fearful narrative. Of course, cold, hard data is a great guide in such troubled times.

Stocks are Washed Out

Fear has taken over in some corners of the market. Investors are slightly shaken. Big Money is exiting – in other words, stocks are washed out.

What do you do? Well, the simple answer is to buy because it often bears fruit down the road. Over the last 10 years, it’s been proven time and again. For those with a MAP, it’s been evident.

That’s because MAPsignals spots the Big Money flows. You can spot them too with a MAP.

If you’re a serious investor, Registered Investment Advisor (RIA), or a money manager looking for hedge-fund quality research, get started with a MAP PRO subscription today.