Semantics?  No!

Bull markets end when the smart money (i.e. buying based upon fundamentals) changes its perception of earnings growth.  Markets “crash” when the dumb money (i.e. buying based upon recent performance) will no longer chase prices higher than already inflated levels.

Where has the smart money been?  It’s followed businesses benefiting from increasing earnings, lower interest rates and technological efficiencies.

Where’s the dumb money going?  Passive strategies pushing indexes to record levels on a seemingly daily basis.

Popular ETFs like those tracking the S&P 500 are weighted by market cap.  Betting on the S&P 500 means concentrating investment dollars in the largest names – the so-called FAANG stocks (Facebook, Amazon, Apple, Netflix and Google).

These momentum stocks are why the performance of managers with fundamental-based investment philosophies can’t keep up with indexes on the upside.  They’re the reason passive investors will lose far more on the downside.  The pendulum swings both ways.

It’s classic tortoise and hare.  Remember, slow and steady wins the race.

So where are markets today?  More importantly where are you putting your dollars?  Are you investing in a bull market or are you contributing to the investment mania?