The equity markets continue to grind higher. Given the economic gloom it would probably surprise most people to know that the S&P 500 has risen over 28 percent in the last 12 months (it certainly doesn’t feel like it!). Sentiment continues to exhibit a negative bias and confidence remains elusive.Bill Gross recently wrote a piece suggesting the “cult of equities is dying”. But ironically bull markets are often associated with periods of fear reminding us of the old adage that “the market climbs a wall of worry”. This past run appears to be no different.Clearly the world’s love affair with equity investing has faded. Various other sentiment indicators confirm this:- A new national opinion poll from the University of Arizona, taken two years after Financial Crisis, suggests 75% of high school students strongly believe the market is rigged. 70% of those students actually believed businesses often try to “trick young people” into spending more than they should.- The American Association of Individual Investors (AAII) sentiment poll just had 13 straight weeks of more bears than bulls.- CNBC’s popularity has plummeted. Their popular morning show Squawk Box, for example, recently posted its lowest-rated time block since Q4 2006.Ironically bull markets are actually periods of fear and scepticism. The current bull market which began in March 2009 and sent the S&P 500 up almost 100 percent (bringing us back to where we were in 2007) seems to be shaping up much like other historic runs. Retail investors still don’t buy it. In fact they still have ploughed money into bonds at minuscule yields. Take a look at the last two years of data from the Investment Company Institute depicting mutual fund flows (see graph).Over the past two years investors have been continuously selling equities as the market has risen (especially in 2011) while adding more and more to bond funds which have offered lower and lower yields.This bull market has lasted about 41 months and its performance has been better than the one we saw in 1990 and 2002 but less than the bull runs that began in 1995 or 1982. It’s impossible to say when the current rally will run out of steam. Generally, however, bull markets falter when the Federal Reserve begins a tightening cycle, investors are over-enthusiastic about equities and valuations become stretched. None of these conditions seems to be in place at this time.Disclaimer: This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed by Anchor Investment Management Ltd. to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. Past performance is no guarantee of future results. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader. Investment involves risks. Readers should consult their financial advisors prior to any investment decision.