Pessimistic Pros Missed the Big Rally, and So Did Many Americans

The U.S. stock market’s rally since late March has been hard to take for many people—including those professional investors who stayed pessimistic too long and missed out on much of it.

There’s a rueful saying among traders that markets will move in whatever direction that will cause them the most pain. Pros who mistrusted the rally have performed worse since the March low than the so-called dumb money—buy-and-hold investors who rode the market down and right back up. “The people who hate the rally are the people who are market gurus, because it makes it seem like their expertise is useless. And guess what? It is useless,” says Aswath Damodaran, an expert on valuation at New York University’s Stern School of Business. “Those people exist to make soothsayers look good.”