“Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can’t buy what is popular and do well.” – Warren Buffett
The stock market is making new all-time highs once again. So naturally, more and more amateur investors are piling in.
According to a recent article in the Wall Street Journal (subscription required), discount brokerages are seeing record daily trading volumes, and investors are borrowing more money than ever to buy stocks. Margin debt hit an all-time in December of $444.93 billion, which was up 35% year-over-year.
Historically speaking, soaring margin debt has provided a warning signal that a bull market is nearing its end.
— Zacks Investment Research