The Canadian Investor - 10 Signs the Stock Market Might Be Peaking

Episode Date: August 4, 2025

In this episode, Simon and Dan go deep into the growing signs that point to a potential market top. From narrow market leadership and the return of meme stocks to rising margin debt, IPO activity, and elevated valuations — they cover it all. They also dive into speculative trading trends, the resurgence of paid stock promotions, and why retail investors might be piling in at the wrong time. While not a doomsday episode, this is a grounded look at the data and sentiment driving markets in 2025.Plus: A warning about shady paid promotions Insights on the Buffett Indicator, insider selling, and S&P 500 concentration Why sticking to a consistent investing strategy is more important than ever Sectors and stocks that may offer contrarian opportunities Check out our portfolio by going to Jointci.com Our Website Our New Youtube Channel! Canadian Investor Podcast Network Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital Dan’s Twitter: @stocktrades_ca Want to learn more about Real Estate Investing? Check out the Canadian Real Estate Investor Podcast! Apple Podcast - The Canadian Real Estate Investor  Spotify - The Canadian Real Estate Investor  Web player - The Canadian Real Estate Investor Asset Allocation ETFs | BMO Global Asset Management Sign up for Fiscal.ai for free to get easy access to global stock coverage and powerful AI investing tools. Register for EQ Bank, the seamless digital banking experience with better rates and no nonsense.See omnystudio.com/listener for privacy information.

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time. Welcome back to the Canadian Investor Podcast. I'm here with Dan Kent. We are back for another regular episode here where we talk sometimes about companies. We'll do some deep dives, some comparisons, some concepts. And we had a pretty fun topic. I don't know how we came about, and I think we started talking about meme stocks and stuff like that, and then decided to do a segment, but I think it's gonna turn out to be pretty much a whole episode about signs

of a market top and some different things that tend to appear when we're approaching market tops and spoiler alert, there's a lot of them that we're seeing right now. Not all of them, but I would say probably 75, 80% of them, just kind of a rough estimate. What would you say with that Dan? Yeah like I don't pay attention a lot to this type of stuff mostly because I just routinely buy

every week. I deposit by every week. Obviously I haven't been recently just because of some outflows I've had to have but after like doing the notes and digging into a lot of these like it it's very 2021 reminiscent I mean there's a lot of indicators that and I'm not like trying to doomsday or anything I mean all this stuff we're talking about is is mostly just like hard numbers but a lot of a lot of hard numbers that have existed in prior situations where there's been some market volatility shortly afterwards. And obviously it's impossible to predict and I'm not selling all my stocks or anything like that, but it's definitely concerning.

And again, once I dug into this data, I was like, wow, this is, it's definitely concerning. And again, like once I dug into this data, I was like, wow, this is It's it's definitely interesting and I'm starting to see it a lot myself to a lot of the activity that was happening you know back in the in the lockdown kind of euphoria, but Yeah, we'll dig into it. Yeah. Yeah. Yeah a lot of I mean the one thing right off the top my head I'm seeing a lot of and I seen, the one thing right off the top of my head I'm seeing a lot of, and I've seen this so much in 2021, was like paid stock promotions on YouTube. That has exploded recently. I mean, it was kind of dead in 2022, obviously.

The market just wasn't there for a lot of these companies to be compensating people to promote their stock, but now it's it's all over the place again. And that was huge in 2021. But yeah, there's gonna be a lot of good stuff. Yeah. And just to add on that. So just for those are not familiar with paid stock promotion, how it works. So typically in Canada, you'll get a lot of the times it's TSX Ventures. So you'll get a company that's listed there and it's pretty shady what they'll do so you'll have the the management team of the company that will look for YouTubers or social media influencers. They'll give them usually a pretty substantial

payment in order to do like a review of the stock that's like highly favorable to the company so that they can actually pump the price and then dumb the shares afterwards. So it's very sketchy. You saw that a lot in 2021 during the pandemic. It's something that we've been offered multiple times for the podcast and we've always refused. First from an ethical basis, I don't think that's right whatsoever. You're essentially using your, essentially yeah, the people listening to you, watching you to make money off their back while they'll essentially lose money because they'll be on the wrong side unless their timing is impeccable of the trade while these...

I won't use the language I want to use, but while these youtubers or social media influencers are getting pretty well compensated and the management team is actually from those companies, those stock promotion companies, are making a whole lot of money on the back of retail investors. So it's a really shady practice. I just wanted to highlight that. Of course we have advertisements for the podcast, but we vet the companies. We only will agree to have ads on our podcasts if we think the companies are trustworthy and the reputable companies. If they're not, and we've refused tons of advertisers before, we

won't do it, but stock promotion was always a line that we would not cross and will never cross. Yeah. And the one, the one thing about it is I, like, as you were talking, I looked up a lot of the ones that I remember from 2021 and the vast majority of them are either bankrupt or trading, you know, 99%, 97% down from their highs. majority of them are either bankrupt or trading you know 99 percent, 97 percent

down from their highs. So yeah, that's just one thing I've noticed that's kind of resurfaced a lot that was very reminiscent of a few years ago. But a lot of this, a lot of the data in here is, it's pretty solid data. It's definitely something that kind of makes you look twice. Yeah, yeah and we always try to be as honest as we can, of course, with our audience. So just be on the lookout for that. There's a lot of paid promotion also in the ETF space,

something to be careful. I know a lot of those covered call ETFs. Some companies will try to push those with social media influencers. So just be on the lookout for that. It's pretty common, especially on YouTube. But anyways, so some of the signs. So the first one that we have here

is narrow market leadership. So a number of mega cap stocks drive most of the index gains, of course. We're seeing that right now. Big Tech is still leading the way for the S&P 500 returns in the US and an easy way to actually look at that for those who are familiar so you have the S&P 500 right like there's a lot of different ETFs you can look at to be able to do the returns there's also the S&P 500 equal weight, so take care of the most well-known one,

is actually RSP. So a lot of people may be aware of that one, but if you're not, it's ticker RSP. And essentially what it does, instead of being market cap weighted, where you have the most valuable companies that represent a bigger percentage of the index and the ETF for example The RSP actually equal weights every single one of the 500 constituents. So what's happening with the equal weight?

It's a better representation. So if you have good returns from the equal weight It means that the you know, the market as a whole should be doing pretty well. But if you have outsized return from the market cap weighted one, so the regular ETF or index, then you're seeing that those handful of names, let's say 5, 10, 15 names, are really driving the returns up. And we're seeing that it's not as far spread as it was for example last year or the year before but the S&P 500 year-to-date is up 9.3% and the equal weighted is up 7.8% so there is some divergence there definitely yeah and I think another solid way to look at it is they have a

lot of ETFs well actually you can do the S&P 500 X anything, like financials, utilities, things like that, but you can go the S&P 500 X tech. So over the last year, the X tech ETF has actually trailed the S&P 500 by a decent margin. And the farther you go back, the larger the underperformance comes. And I mean, keep in mind, this would not even exclude companies like Amazon,

Meta, Alphabet, because I think Alphabet is communications. I think they're classified as. That's right. So they would still be included in that. And it's actually trailed by quite a bit over the last while, which kind of gives you an indicator of what's actually driving the returns And if you look at the s&p 500 it's trading at around 26 X earnings and if we look to a fund like Sbxt you have it on the on the joint TCI there right now. It's actually reading at 23. So It's quite a bit cheaper

Which I mean makes sense But on the flip side of this uh... which i mean makes sense but on the flip side of this is driving most of the earnings growth as well so it does make sense to a degree that it's driving the results so the earnings growth of the s&p five hundred over the last five years has been around eighteen point five percent if you look to that

ex-tech ETF earnings have grown at a fourteen percent pace so technology has done quite well over the last while but it's definitely Well, I mean, I'm not sure if we're still there But weren't we at like the highest levels of concentration the top ends of the s&p 500 and like yeah, I think we're still Yeah, yeah. So I mean this obviously adds adds risk on on an indexing level for sure obviously adds risk on an indexing level for sure. In this kind of market, I like having some cash on the sidelines. It gives me the flexibility to jump on opportunities when the right stock goes on sale. But just because the cash is

waiting, it doesn't mean it shouldn't be working for me. That's why I use EQ Bank. They offer some of the best interest rate among Canadian banks, so my money's still earning while I wait. You can even get a boosted rate by setting up direct deposit for your payroll and depositing $2,000 or more per month into your EQ Bank account. Your cash stays liquid and ready to go when it's time to invest. And if you're not in a rush to access your funds, EQ Bank's Notas Savings Accounts and GICs are great ways to grow your

returns even more. It's a smarter way to park your cash. Visit EQBank.ca to learn more and keep your money earning even while you wait. Want to buy a stock but don't want to shell out hundreds or even thousands for a single share? With Questrade's new fractional shares you can invest any dollar amount and build a diversified portfolio instantly. No delays, no trade fees, no excuses. Want to put $10 into a stock trading at $100? No problem. Questrade has you covered. They're the first broker in Canada to offer real-time commission-free trading for US fractional shares in ETFs. It's simple, powerful, and finally available in Canada. Head to Questrade.com to open and fund an account.

Use code TCI and you get $50 to get you started. In today's volatile markets, making smart investing decisions matters more than ever. That's where the Globe and Mail comes in. From stock analysis and earnings report to tariffs and interest rates, the Globe's business and investing news help you take action. With tools like CPP, RRSP, TFSA, and mortgage calculators, the Globe offers a full suite of resources to help you plan, invest, and stay on track, no matter where you are on your financial journey.

Ready to invest in you? Visit globeandmail.com slash subscribe for unrestricted access at a special introductory Yeah, and if you go back, so I was just, I'm sharing here for Joint TCI, so they'll see. So I went back for all three, so the S&P 500, the 1X technology, SPXT, and then RSP, the equal weighted. So if you go back to the start of 2023 when things really started, like picking up steam after the down year of 2022, following the excesses of 2020 and 2021, we see that it's just the S&P 500 has just crushed the other two. So the S&P 500 total return 74.5%.

You get the X technology total return 49.8%. Keep in mind, that one would still be market cap weighted, I believe, right? It just excludes technology. And then you have the equal weighted that includes technology but has a much lesser impact because it's equal weighted. That one is up 40 percent. So you're really seeing that divergence between all three here. Yep and I mean again techs driven most of the earnings but it's definitely outpaced that earnings growth relative to, you know,

companies that are not involved in that space. So as a result, you have that, you know, large concentration at the top, which ultimately, again, if you're indexing the S&P 500, I mean, you're heavily, heavily exposed to the top end companies in that regard. Yeah. And then, so the next sign here would be increased speculation. So we've seen this, especially in the last like month or two, the return of meme stocks, maybe not to the extent that we saw with like a GME, for example, GameStop back in early 2022 if I or was it? I think no, it was early 21. Yeah, early 2021. I think it was January of 2021 that it really took off. But we're seeing that happen again.

You're also seeing it with crypto. These like meme stocks are starting to pick back up again, something to keep an eye. Penny stock. So one of the poster names right now would be Opendoor. So it's a technology, real estate technology company. I looked at the financial and this thing looks completely horrendous. Like they are losing money, revenues are going down, they're losing money on free cash flow, net income. Apparently they were gonna do a reverse split but

because of the recent run-up of this, they actually decided to put that on hold because I guess now, typically companies will do it reverse, but especially if there's a risk of being delisted because of the share price is too low. So they have put that on hold, but for people not familiar with open door, it would be ticker open. And it peaked, it had like essentially 300% returns

in the matter of just a few days or a week or so. Now if you go back from July 7th, it's up 186%, but it peaked around July 21st. But again, we're seeing these massive rallies with meme stocks that is definitely a sign of increased speculation. You also have GoPro, take care of GPRO, is another one that saw rally in the past month of close to 100%.

Again because of a meme rally, Krispy Kreme is also DNUT, DNUT is another one. So there's really increased speculation on companies that are not profitable, also increased speculation on high risk options as well. Yeah, so I have, I'll actually share this chart from Goldman. So they have a speculative trading indicator. So they pretty much take trading in penny stocks,

unprofitable stocks and stocks with EV sales multiples in excess of 10X. And this is kind of their kind of benchmark for speculative trading. And it's actually reached its highest point since 2021 and is actually creeping upwards to the highest points we've seen since 1990. So you'll notice in this chart here, penny stocks are at 98% stocks with the EV sales

multiples greater than 10x are at 96% and unprofitable stocks are 85. So pretty much what this is saying is since 1990, only around 2% of the time have penny stocks seen more trading action than this. 4% of the time, expensive stocks, EV sales multiples have seen more trading. And you kind of get the gist here, but what it's trying to say is this is probably one of the more speculative environments we've been in for

a very long time and the other one they do here is the call options. So call option activity, obviously if you're in call options here it's bullish overall and that makes up more than 61% of options activity. So if you look at this chart here, you can see, you know, it would typically hover anywhere from, you know, 49 percent to 55 percent. And then obviously we had the huge surge in the pandemic when it when it increased to like 66 percent. But now we're kind of creeping up there again. It's one of the more active times when it comes to call options in history and it's pretty crazy. So yeah, I'll get out of that. No more of that. But US households exposure to equities is actually at all time highs.

So excluding pensions, US households have around 44% of their total assets in equities. This is higher than pretty much every point in history, including 1999, 2008, 2022. I would argue like 1999, 2008 is probably, it's a lot easier to own stocks today, which is probably fueling a bit of that. In 1999, you couldn't just hop on to Wealthsimple or something like that and open an account in a few days.

The counter argument to that is there's also more defined contribution pension plans. Now that there were back in 1999 and 2008, for those not familiar with those, essentially your employer will be doing some matching. You'll contribute to the pension plan, they'll match, and then you have essentially an investment account with a preset number investment that will typically be in just institutional grade funds and you decide into what's invested. Back in 2008, 1999, there was a much larger proportion that were these traditional defined benefit pension plan where you contribute to your employer's pension plan. They'll also

put some money in and then when you retire, there's a formula and they will pay you a certain amount based on that formula will typically include a multiplier, your years of service, an average calculation of your earnings over a certain period of time. So it was more back then, so there was less of a need to invest in the stock market. Exactly, than there is today. So that would be the counter argument with that. And the other argument I would say that's a bit worrying

is the older you are, typically the more assets, including stocks, you will have. So that's a pretty high number if you think that people that are closer to retirement or into retirement are probably having an outsize impact on that number itself when they should be de-risking as they get closer to retirement. So those are the two things I just wanted to add here. Yeah. And it's probably, although it might be the proper thing to do, it's probably difficult to de-risk right now

when the last, you know, what has it been? 15 years of market returns have just been absolutely through the roof. But the other thing on this, I couldn't find any actual data on this, but I'd be willing to bet that a large chunk of this is in US equities as well. Because you know, a lot of people,

yeah, it's like like again, it's- I don't have the data in front of me, but I've seen the data and the US has a outside proportion of the market capitalization of stocks in general worldwide compared to the number it should be. So it represents the worldwide stock market. It's a much smaller number than the actual like percentage of money that's invested there. Yeah. Yeah. And I mean, if you think about it, like what this ultimately does is kind of amplifies potential corrections

crashes in the markets, especially the US market as you know, a large chunk of US consumer wealth is tied up and is more influenced by your net worth by market movements. So in terms of the speculative end, you have penny stocks trading at the peak, but pretty close to the peak. Same thing with expensive stocks, unprofitable stocks. I mean, you have the call option activity. It's like, it's, it's just hard data that points to the fact that it's very, very speculative market right now. And I mean, especially when we start talking about the margin stuff, it becomes even more apparent.

Yeah. Now the next one here, the number three point is elevated valuation. I think it comes to no surprise if you've been listening to us for a while or you're aware of what's happening in the market is valuations are definitely pretty high compared to recent history and that is typical for market tops. Valuation dispersion between sectors can also widen dramatically, which we've talked about with tech and other sectors, for example. But it's not just tech, right? It could be just kind of blue chip popular kind of companies. You can see those valuation widen dramatically. Things like the Buffett indicator. That is one that I like quite a bit.

This one is actually through the roof. So this one is pretty simple. So essentially the Buffett indicator compares the total US market cap compared to the US economy, US GDP. And essentially right now we're at above 200%. And historical norms actually are within maybe, let's just say, 80 to 120%. That's kind of the range where it's the most commonly at. Maybe even a bit more like 50 to 110, 120% is a bit more traditional where we're at. And right now we're just through the roof.

And there's other valuation metrics you can use, but I won't bore people with that. But just to say that most of them are extremely elevated right now. Yeah, it's like more than double what it normally is. The other thing that's a big indicator here for, from a valuation perspective is let me pull this chart up is the insider buy sell ratio so right now it sits at

0.21 so pretty much what this means is insiders are selling shares at almost five times the rate they're buying them And I mean you can see by this chart here, you can pretty much pick out the bear markets like without even thinking about this much. I mean you have 2020 obviously it was through the roof, you have 2022 we can see it elevated here you can have 2008. But right now you're looking at you, the vast majority of insiders are selling stocks at a much faster rate than they're buying them, which, you know, there's plenty of reasons for insiders to sell stocks.

I mean, there's one reason to buy and there's probably a million reasons to sell. But when they're selling at 5x the pace, then they're buying. I mean, I think that's a little bit more of an indicator that, you know, a lot of these companies probably believe that their share prices are fully valued or, you know, debatably overvalued. So I think that's, it's a pretty neat, it's not

one that I would put a ton of influence on, like a ton of reliance on, but it's definitely, you know, when they're doing, when they're selling at 5X the paces they're buying, it's definitely something to, uh, you know, take into consideration. And you know, obviously for very long periods, low interest rates fueled expensive market

valuations, but the interesting thing here is like, we're in an environment where rates are much, much higher than they've been historically yet, valuations continue to be stretched out and you know the markets can stay overvalued for a very long time we've seen this before the only thing stretch valuations do is kind of make it so that the markets are priced to perfection so they gotta they have to execute if they execute everything could be, but they're more vulnerable to big volatility. Let's just say, for example, in two or three years of all this AI, Capex spend doesn't

necessarily bring in a ton of profits for a lot of those tech companies rolling out $80-plus billion. I mean, that could be, you could see some significant volatility in that regard. Yeah, and that is also something that Redalo talks about in his new book. He mentions for the long-term debt cycles that we are currently in according to him. And based on the data I've seen and also reviewing

a lot of his work, I would tend to agree here. Market valuations tend to be high and outside the historical norms towards the long-term debt cycle. So we're not talking, it's a bit different than market peak, but again, it's not unusual to see market peak at this point in time in the long debt cycle. Number four here, record IPO or secondary offering volume. So you see companies that are rushing to IPO because investor demand

is extremely high. So we saw that in 2020. And then, well, actually we saw pullback in early 2020. And then as the year went on and companies saw that there was a lot of money coming into the markets, then you saw those IPOs really ramp up. And 2025 has been the strongest IPO year since 2021, but it's still much much lower than 2021, which was insane in terms of both volume and total dollar raise. For context, Q2 2025 saw 59 IPOs versus 152 in Q2 of 2021. The amount raised was also about three times higher in 2021 compared to Q2 of 2025. However, let's keep in mind that it's still the most, the biggest beginning of the year since 2021. So it is something to keep in mind. Anything to add there? We'll go on the next one. I know you

have a lot to say on that one. Yeah, no, I didn't add anything to the IPO stuff. I know there was a lot of Canadian IPO. I mean, we had, I'm pretty sure we had Telus International back in 2021 and that biggest, biggest tech IPO in history. They probably wouldn't have raised as much as they did if it was not in 2021. But yeah, it's starting to ramp up again. And obviously these companies want to go public when people are gonna Buy the shares and institutions are gonna give them the money. So yeah, it's not surprised Yeah, exactly Increase margin debt. So that is a big one

So investors get more and more bullish as a result start investing more and more on margin finra data, which is a US tracking more and more on margin. FINRA data, which is a US tracking, can't exactly remember the actual name of FINRA, but it's a US organization, shows that margin debt peaked a few months before the market peaked in late 2021. The current margin debt data shows that it's at the highest point since, although it hasn't quite reached those levels on an actual inflation-adjusted basis, but it's starting to get pretty high. As you can see here for joint TCI subscribers, that margin debt is very high. So the margin debt here is in purple, and you're seeing that it's approaching the

2021 levels and definitely at the highest ever since and it's definitely peaking more and when you start comparing especially with the S&P 500 you're starting to see that the margin is increasing rapidly and just the data I'm showing is from VEDA-FI advisors perspective, but they took again the data from FINRA, the US regulator. Yeah, so this one I have a chart here of, it's just from the notes, but it's effectively they have the FINRA margin debt and then they have the returns of the S&P 500. And you can pretty much see here,

like I put these little red lines, where when margin debt escalated, like peak kind of like euphorically went up, there was pretty much always a correction afterwards. I mean, you look back to 2000, it spiked in 2000, and then the S&P would kind of go on to be well I mean have very poor returns for a very long time I mean we look to the financial crisis again it spikes up here followed by a correction the only time that I would say it probably

didn't happen is 2018 I mean I know the markets went through like a very very sharp correction at the end of 2018 and then they and then they kind of recovered but I mean you see it again here in 2022 it Absolutely spiked in 2022. I would argue that's because margin was also the cheapest. It's ever been at that time. But again You have that, you know amplified drawdown and here we are again in 2025 I mean, we're we're spiked up again and I mean it's and 9.5% in a single month and they're now 24% higher year over year on an inflation adjusted basis as you mentioned they're pretty much back where they were at the last peak in October 2021 and again the markets themselves were to have peaked in December of 2021 and I mean in this

regard like leverage amplifies gains during bull markets but it also obviously it heightens those crashes and those corrections and you know when the markets are going like this investors who are investing on margin I mean they start spreading themselves thinner and thinner and thinner it can ultimately cause a huge cascade of selling because you know the desire to earn way more the desire to margin yourself up even quicker desire to margin yourself up even quicker. If the market does tank and you get margin called, you probably, like, I don't want to say always, but you might not have that cash to cover

the margin call and you're ultimately forced to sell. Yeah. And then that just creates a constant feedback loop. I mean, they have to sell which lowers prices, which issues more margin calls, which causes those people have to sell. And it obviously creates a lot of volatility in the markets.

And I mean, we're sitting at peak margin debt right now. Yeah, no, exactly. Margin debt is always very, very dangerous. In this kind of market, I like having some cash on the sidelines. It gives me the flexibility to jump on opportunities when the right stock goes on sale. But just because the cash is waiting, it doesn't mean it shouldn't be working for me. That's why I use EQBank. They offer some of the best interest rate among Canadian banks, so my money's still earning while I wait. You can even get a boosted rate by setting up direct deposit for your payroll and depositing $2,000 or more per month

into your EQBank account. Your cash stays liquid and ready to go when it's time to invest. And if you're not in a rush to access your funds, EQBank's Notas Savings Accounts and GICs are great ways to grow your returns even more. It's a smarter way to park your cash. Visit EQBank.ca to learn more and keep your money earning even while you wait. Want to buy a stock but don't want to shell out hundreds or even thousands for a single share? With Questrade's new fractional shares,

you can invest any dollar amount and build a diversified portfolio instantly. No delays, no trade fees, no excuses. Want to put $10 into a stock trading at $100? No problem. Questrade has you covered. They're the first broker in Canada to offer real-time commission-free trading for US fractional shares in ETFs.

It's simple, powerful, and finally available in Canada. Head to Questrade.com to open and fund an account. Use code TCI and you get $50 to get you started. In today's volatile markets, making smart investing decisions matters more than ever. That's where the Globe and Mail comes in. From stock analysis and earnings report to tariffs and interest rates, the Globe's business and investing news help you take action. With tools like CPP, RRSP, TFSA and mortgage calculators, the Globe offers a full suite of resources to help you plan, invest and stay on track, no matter where you are on your financial journey.

Ready to invest in you? Visit globeandmail.com slash subscribe for unrestricted access at a special introductory rate. Now, the number six here, it's excessive bullish sentiment. So you have things like the Fear and Greed Index from CNN or the RSI, so the relative straining index. You can look at that if you want for the S&P 500 or different stock markets. So the fear and greed index, it's definitely in the greed level

borderline extreme greed. It was extreme greed I think about a week ago. You can take, you know, take it with a grain of salt, but it's definitely at an elevated level right now. The RSI is usually from zero to 100, and anything above 50- 70. Is it- 70 is overbought. Yeah, but the 50 is that, yeah, 70 is overbought, but anything above 50, you're starting to

get into overbought territory, and then below 50, you're starting to get into overbought territory and then below 50 you're starting to get into oversold territory. Right now I think the S&P 500 is about 5560 so it's not the last time I looked it's not super high. I'll show a chart of it when I go it's at 70. You go ahead. Oh is it at 70? Yeah.

Okay I was looking at the wrong one I think I may have been looking at the future. That was the fear and greed. So that's a little bit different. You were looking at like the fear and greed, I think that's the average. Yeah, yeah, yeah. Yeah, I know I was looking at the fear and greed. I said I was going on memory for the relative straining decks. Do you have that?

Yeah, I'll pop this chart up here. Again, it's from the notes here. But yeah, we can see the S&P 500 chart here. This has simple moving averages, but also the RSI is at the bottom here. And it's at 70.3 right now. So it's it is oversold right now. And again, I did like a long term chart kind of going back to the 90s. And you can you can see often when this RSI hits above 70 and kind of stays there

for a reasonably extended amount of time. We do typically get a decent correction. I mean, you can look back here to, to 2000, it stayed at that 70 range for almost two years, and then obviously it bombed a financial crisis was actually pretty interesting. It did not stay above for very long and then tanked. The one situation where I guess it wouldn't have happened was probably in this middling part, like January 14 to 18. It did hit those points for a while. And then obviously in

2018, we went through a very quick correction and then back up. But 2021, we hit it. We were actually almost at 80 in 2021. And then we got that sharp bear market and now we're sitting just oversold or sorry, overbought. So, um, this is like, this is not an indicator that I would put a ton of weight in, but it's, it's pretty interesting. If you look, if you look back to these charts, I mean, typically when we get to that overbought level, we do get a bit of downside,

never guaranteed, but it's just another interesting chart. Same thing for the fear and greed. I mean, it's not something you would put too much stock into the RSI either. They're at similar levels, I would say, right now, each of them. And yes, to be clear, they are different. I was trying to go on memory for the RSI for the data I'd seen before, but something to keep an eye on because those are definitely, they're showing still quite a bullish sentiment. The next one here, retail inflow surge. So, there's been really an explosive growth in ETF and mutual fund and flows into equity. The US saw record net inflows for ETFs in the first four months of 2025, in large part driven by retail investors. Even BlackRock saw pretty

strong retail net inflows in Q2 of 2025 when they reported. And according to independent research firm ETFGI data, they have ETF inflows have doubled on year to day basis compared to 2024. Again, this would be for Canada. Sorry, I didn't specify that. So this would be in Canada and it is largely driven by retail investors. So it is something to keep in mind. So there's more and more information. I mean, there's also these like double, which is kind of a mix of leverage,

obviously these levered ETF, single stock ETFs, like the increased popularity in that. So it's essentially, I think driven quite a bit by retail investors. Yeah, and that's kind of what BlackRock had mentioned in its recent quarter, is that like the inflows is unusual just due to the kind of macro environment.

I mean, this would be US data, but I mean, I'm guessing what they mean by this is usually when the environment is like this, you know, elevated interest rates, tariffs, inflation, etc. They'll probably see smaller retail inflows, but they just, they continue to increase while I think on the institutional side of BlackRock, like there's actually outflows, or at least to a certain degree, like there is some institutional outflows. And I think like to a degree, like retail investors are kind of late to the party. I mean, they tend to avoid stocks when they're low and buy them when they're high, which is kind of late to the party. I mean, they tend to avoid stocks when they're low and buy them

when they're high, which is kind of a situation. I mean, it's just, it's almost a guarantee during every bull run. This will kind of be what it's like. I mean, if you look to previous situations, mutual funds, record inflows in 1999, 2007 and 2021. So that's kind of an interesting situation. I do believe there's also a lot more retail, in fact, they make up a larger portion of the market now than they did just because of, you know, the pandemic just causing a massive surge in the popularity of investing overall.

I mean, I've dealt with quite a bit of investors over the years, and this is definitely just kind of an element that investors believe the market is safer when it's going up. When in reality, it's riskier. I mean, in reality, the safest market to have invested in in recent times would have been 2022. However, I mean, most people, you know, they're generally short-term focused no matter how much they want to preach long-term they don't want to buy stocks now when they could fall 10 20 30 percent over the next year they want to buy stocks with the idea they'll be up 10 20 30 percent over the next year so it's really not all that surprising to see that most people if you were to ask most people they will feel safer investing

in a bull market when in reality the bear market is the safer period to invest. Yeah. The recency bias is pretty strong. Unfortunately, that's what it is. And look, I mean, things, the party can go on for a long time until it does. And that's why, you know, at the end of the day, and we don't want to freak people out, obviously there are some signs here, but I think it's almost impossible to time the market.

And the last thing you want to do is be all in cash. And then the market goes up, you know, another 50, 60, 70%, whatever the number is from here. And then there's a 20, 30% correction, right? Like it's, that's the last thing you want to do because yes, the correction eventually happens, but you missed out on all of those gains and then you also have to, you know,

a lot of people think they can time the market properly, but it's very difficult to do. So that's why it's very, it's very tricky to do and that's also why you want to be diversified. I said it for quite some time now, not only diversify in the equities or stocks that you own, but also have some diversification across asset classes I think is very important. Yeah.

I mean, I think another important thing here is just like a dollar cost averaging strategy. I mean, I buy every week regardless. So yes, sometimes I'm going to go through periods where I'm paying a lot. Sometimes I'm going to go through periods where. I'm not paying all that much, but what a lot of people will do is they'll buy more in a market like this and less than less than a market like 2022. Whereas if you just stick to a routine strategy of buying, you kind of remove all

the worry of any sort of market crash because if you're buying every week now, you're going to be buying every week when it's 30% lower. So you take a lot of the worry away, but a lot of people start to deviate. I mean, look at the margin, look at the margin, all the speculative type stuff. I mean, it's pretty tough to stick to a strategy like that, especially when you see a lot of people on social media, they're buying all these penny stocks are up like 60% in a day or a week or whatever. So you start to mess around in that regard.

YOLO baby, you gotta only live once. So that is not surprising. I mean, fear and we actually will be doing probably next week, a segment on takeaways from poker's to investing, because we both have quite a bit of experience playing poker. And I encourage people to listen to it, whether you know poker well or not, it really doesn't matter. There's actually a really high number of parallels between both.

And one of the things with poker that you see all the time is fear actually drives a lot of decisions. So whether it's the fear of not getting paid when you have a big hand or fear of losing a lot money, you see that a lot. And you can actually translate that to the stock market. I mean, the fear of missing out. I mean, you can make a case that it's happening right now, but also the fear of losing money when the markets are not going well is super strong as well. So fear. Poker and investing is a very big driver for a lot of people. Yep.

Emotional decisions. And I mean, you could just, you can eliminate all those emotions by having a strategy and sticking to it. But often people deviate a lot during times like this. That's it. So the next one, so we have three more. This one will be relatively quick. So media euphoria.

I would say that we definitely have seen an increase in bullishness in mainstream media over the last few months. I mean, you can just look at CNBC. I know I've seen more and more bullishness here. I mean, obviously, for them, it's a lot of click bait where they tend to be like, oh, markets are up again or articles that are bullish or stocks that you need to own with their pro stuff,

but you see it, pick your mainstream financial media and there's a whole lot of bullishness. There's some bearishness if you look into more niche publication. That's where you'll find the bearishness and if you're on Twitter, you'll probably, depending on who you follow, you'll see a decent amount. But for mainstream financial media, I've noticed, and this is just my perception, that there has been more and more bullishness. Yeah, I don't even think it's like a confirmed,

I don't even know if it's perception. Like it's definitely confirmed. Like they pretty much represent the- Thank you for confirming, yes. Like you see it all the time. I mean, they represent the public mood. I mean, if you think about it, nobody wants to read about how the market is going to crash during a bull market.

So they generally produce less content related to that. And nobody wants to read about how stocks are going to soar in a bear market. So they generally, like generally when it's bearish, the content is bearish. And when it's bullishish the content is bearish and when it's bullish the content is bullish and I mean, I think when the media is unanimously going one way or the other it's definitely a Cause for concern I guess because ultimately they're trying to get clicks. That's you know, that's how they make money They get clicks they get subscriptions things like that. So Yeah, it's it's definitely that's how they make money. They get clicks, they get subscriptions, things like that. So

it's definitely massively bullish right now, for sure. Unless you said you dig deeper into, say, individual investors who write publications, they're generally a bit more balanced. But for a lot of those mainstream companies, they want traffic. And when the markets are up this much, what's going to get traffic is talking about how stocks are up this much. Yeah, no, exactly. The next one here is weak or peaking earnings revision. Earnings revisions flatline while stock prices keep rising. This is basically what we're seeing right now and when we say earnings here it's more in the aggregate so this is exactly what you're seeing from S&P Global. They've been doing while they do earnings projections. They're not the only ones but they're one of the more cited ones and they already have revised downward their 2025 and 2026 earnings projection for the S&P 500. I think they've done it actually twice so far this year. And you're also seeing more and more businesses express macro risk concerns

related to the global NUS economy. I mean, we talk about earnings and news all the time. I mean, don't take our word for it. If you want, just go and listen to those calls and you'll you'll hear exactly what we're saying. There's a lot of different businesses that are essentially just withdrawing guidance because they can't, they don't know what's coming up or they're saying they're revising the guidance downwards because there's just some weakness, some macroeconomic weakness and you're seeing that more and more right now. Yeah, I mean we haven't done a lot of earnings where on the conference call, they aren't talking about like the uncertainty when it comes to tariffs, when it comes

to the economy, but stocks keep going up. I would argue actually probably the ones that aren't really talking too much about, you know, the hesitancy is probably those bigger tech players. talking too much about you know the hesitancy is probably those bigger tech players they're just continuing to roll out tens of billions of dollars into infrastructure so this is definitely yeah it's it's a concern but it's also like a lot of the a lot of the chatter is around you know a lot of cyclical companies like airlines truckinging companies, things like that, clothing retailers, but yeah, it's definitely something to keep an eye on.

Yeah, no, exactly. Something to keep an eye on, especially as prices are actually increasing. Yeah, keep going up. Of these companies, yeah, the stock of these companies are increasing and earnings revision are going the other way. I don't know if there's more of a warning sign there than this one. The last one here, I think we can just chat about this one, but I think this one is really, really interesting

right now. Complacency around macro risk. So investors will typically in near market tops disregard risk like inflation, tariffs, geopolitical, and increased polarization of politics within specific countries, which could all have a big impact on markets. And I think right now we're seeing exactly that, right? We saw Liberation Day, which had a baseline tariff, tariff of 10% and then this weird calculation based on the trade deficit with countries that went to these crazy numbers. And then the stock market and bond markets, more specifically the bond market, freaked

out and then the US did this 90-day pause and they add a softer tone with China as well. But now what we're seeing is that we're actually seeing that the baseline tariffs may be around 15 to 20 percent with most of these trade deals. I think that's what Europe and Japan agreed. And you're seeing more and more of that 15-20% range which is still pretty significant tariffs. You still are seeing some geopolitical tensions around the world. Obviously politics is as polarized as ever.

Pick your country and I'll show you some polarized politics. And it just seems like the market is completely shrugging that off. Yeah. It's hard to like give me an argument that the markets are not being complacent. You can't really. I mean, it seems like the first time he announced it, the markets, well, obviously they tanked. And then it just seems like, kind of seems like nobody believes him anymore, I guess. I mean, he changes his mind all the time. So I mean, it just seems like people are kind of shrugging off the news now because it was really

impactful the first time he did it. But then there's new trade deals, canceled trade deals, delays. I mean, it's just nonstop. So I mean, I think I think that's in regard. They're shrugging it off. Like they don't. Yeah, I don't know. I guess they just don't really believe him. Yeah. And I guess to a lot of people are saying well You know like especially the hardcore Trump supporters the MAGA supporters are saying well see like there's no inflation with tariffs Yet a lot of people have short-term memory because we saw when the Fed started really Quantitative easing that easy monetary policy zero interest rates essentially, and

central banks around the world follow suit. I mean, it took some time since before we started seeing the inflation. It didn't happen overnight. And the same thing would happen, and we talked about it before, is you get these companies that are buying goods, well, they knew tariffs were happening. So obviously, if you know tariffs are happening, you'll pile up on some of the key things that you need that may be tariffed. So, you build up that inventory.

So it will take some more time until they essentially replenish those inventories and then they have to replenish them with higher prices. So it will take some time until that starts feeding into the economy. Of course, some of those tariffs may be eaten by the companies themselves, that's fine. Or even the producers from other countries, maybe they'll try it, like they'll get lower margins so they can still keep those sales despite tariffs. But at the end of the day, I think a lot of people just think it won't have any impact on inflation, and maybe it will have little to no impact, we don't know, but to think that right now we have the data to support either way is just completely missing the boat. I think

we will start seeing whether it has a real impact on inflation, Probably towards the end of this year, the most common timeframe from reputable macroeconomists that I've seen is around six months, six to nine months is probably the best timeframe from the start of tariffs because of what I just mentioned is a lot of companies purchased on front and built up inventories so they would be able to weather this old tariff situation as long as they could in the hopes that maybe tariffs are rolled back. Whether they happen or not, we'll have to see. But now the trend seems to be 15 to 20 percent

seems to be the baseline tariff rate. Yeah, like we're only, well, what was it April? Like we're only what? Like three months in. So, I mean, it's just not, it's not enough time to know. And obviously, I mean, it's also difficult to predict because again, like deals happen, they don't happen, the tariff numbers change. Like it's impossible to know. And consumers and businesses will often find maybe local alternatives that's always possible, right?

They find local alternatives that may be just slightly higher, not too much higher. There's a lot of different things that can happen or people just end up saying, well, stuff I don't need, I just won't buy it, right? So there's all these different things that could have an impact on inflation. But I guess it's a good point to end it. It was a fun episode to talk about. Again, we don't want to be freaking people out. Like, we're not saying here, go and sell all your stocks and Bitcoin, go whatever, all

the assets you have, bonds, and just go all into cash. That's not what we're saying. It's just there are a lot of signs that markets are nearing a peak, whether that happens or not, whether these signs are accurate or not, who knows, we don't know. Again, I'll say it again, my view, and I've been very consistent with that,

it's been a learning that I've had in 20, following 2022 and the rough year I've had for my returns is I want to be more diversified across asset classes and try to build a portfolio that will be resilient in a lot of different environments. So I'm pretty comfortable where I'm at, but I know there's a lot of people that are 100% in equities and that's fine if you have a long enough term or long term horizon if you're in your 20s or 30s and you need those for retirement you'll you know you'll probably at some sooner or later there's gonna be a massive correction but that's okay you have a long enough time frame that you'll likely recover

from it but for those who are closer to needing the money, five to 10 years, this may be a time to just review your allocation and maybe tweak it a little bit so you're better diversified because five to 10 year horizon is not a long time. Markets can go sideways for five to 10 years. That's a pretty reasonable assumption, to be honest. Yeah, it's happened numerous times before. But like you said, this wasn't really an episode to encourage people to sell their stocks.

I'm not selling anything. As I mentioned, I'm just doing what I normally do. I just buy every week and that's it. If the market is 20% higher at the end of the year, I'll buy that week. And if it's 30% lower, I'll buy that week as well. It makes it a lot easier. Yes, you'll overpay at some times, but again, like I mentioned, you'll underpay the other times. And you'll be able to remove the entire decision-making process of, you know, should I buy here, should I buy here? It just makes it a lot easier. Yeah. And there are some contrarian plays, right? There

are some sectors that are actually trading at pretty cheap valuations just because they're out of favor. So it is something that maybe instead of looking, and we said like one of the points was there's a more and more divergence between certain sectors of the economy maybe looking in those sectors that are a bit out of favor is if you can find some really good companies and there are some you know it could be an opportunity as well while everyone is throwing money at Nvidia 2x lever DTF and you can look at I don know, maybe like oil and gas. I mean, I know it's not for everyone, but they're trading at relatively cheap multiples right now.

Again, it's cyclical, but that's just one that's trading relatively cheaply. Whether you believe in that or not, that's up to you. But that to say, there are areas of the market that are still, you know, cheap trading at cheap valuation. Remember when we talk about the S&P 500 equal weighted or X technology, well, there's a lot of companies in the X technology to look at. Some some may end up being some pretty good investment. Yeah, I mean, even if you look to logistics, I mean, trucking railroads, I mean, often when all the

money flows out of these companies, when obviously we're in a freight recession right now, I mean, a lot of that money's flowing into tech and a lot of those companies are relatively cheap because we're, I mean, I don't want to say at the bottom of the cycle, but in a bottom area, I mean, obviously we've seen demand just kind of collapse, but there's opportunities in every single market.

But just the top end of this one, there's a lot of signs that we're kind of, well, I mean, we're expensive right now. We are expensive. So whether it is an actual market top or not, I guess only time will tell. Well, it'll be interesting to revisit this maybe like six months to a year down the line. And you know, either we, all these indicators were actually like giving us a warning that what was coming or we'll say, you know what&P $8000, $9000 let's keep going right so we'll have to see but I hope everyone enjoyed the episode. Thanks again

for listening we always appreciate the support you can if you want to support us you can find us at JointTCI.com we will be increasing the pricing in September, but you can lock in a current pricing going forward if you want to get it now. We're also on Twitter. I'm at fiat underscore dyesburg, Dan, at stock trades underscore CA, if I remember that correctly. I'm a bit sporadic in the posting, but I'll probably be posting a bit more going forward. Just took a little break in the last month or two or so, so I'll probably be posting a bit more going forward. Thanks again for listening. We will see you next Thursday. The Canadian Investor podcast should not be construed as

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