Historical evidence shows that the trend in consumer confidence has lagged the slowdown in economic growth—usually falling sharply only after the worst of the economic slowdown is over and economic activity is poised to rebound. More importantly, consumer confidence has consistently been a contrarian indicator for the stock market—the worse consumers feel, the better the gains over the coming year. Since 1978, the lower the level of consumer sentiment, the stronger the stock market gains over the coming year, and likewise, the more optimistic consumers are, the weaker the subsequent stock market performance. When consumers are very pessimistic with sentiment below 60, as it is today, over the following 12 months the S&P 500 has posted a 23% gain, on average. Thus, we need to go against our instincts and stay invested to be rewarded.