For many reasons, consumer sentiment and our view of the next 12 months is uncertain at best. When we are cautious, we control our spending more than when we are super positive. That’s where we are now. If you want to know how cautious we are, look no further than the rush of money that’s gone into money market funds. There’s currently $5.5TRILLION sitting in money markets now. For perspective, thats 1/3 of a total years retail sales for the world’s largest economy. For the first time in over a decade, an investor can earn a real return on their cash. Holding more cash when you feel uncertain may feel good but generally consumers will hold this cash long after the riskier assets, equities, have bottomed. I have no special insights into what the market will do day-to-day but the typical consumer allows his/her emotions to make investment decisions, and generally they buy and sell at precisely the wrong time. Below, I show the current look on consumer sentiment. Eventually, some of the caution will need to be re-set and there could be a massive amount of money going into stocks AFTER they have already run, this provides more fuel for any market rallies. Again, it’s not an IF but a WHEN.