January of this year found the largest single monthly increase in the margin levels until recently. The amount of debt soared in September of this year by an additional 4+ percent, according to the latest data from the New York Stock Exchange. In case you were wondering, though, margin debt now stands at more than $400 billion. We have now surpassed the amount of debt held in portfolios in 2000 and are quickly approaching the record highs experienced in 2007.
Growing up I remember calling the weather number on our rotary phone. Today I reach for my smartphone and pull up the weather app. The dashboard of information I get about the weather is far more concise and readily available. The same is true of economic and market indicators today. The amount of information we can receive, ponder and ultimately apply to our strategies is mind-boggling compared to a few years ago.
There are those that would argue that since the data is so available that its value has declined. Perhaps in some areas this is true but what we witness is people ignoring the weather report when things look sunny outside. Make no bones about it: The market is shining bright right now and may continue to for some time, but the sentiment data suggests the possibility of storms in the future. Don't forget your umbrella.
Joseph “Big Joe” Clark, whose column is published Saturdays, is a certified financial planner. He can be reached at firstname.lastname@example.org or 640-1524.