Mr. Market has caught a case of the grumps. The question is why — and what that means for your investments.

Pessimism remains above its historical average of 30 percent for a seventh consecutive week and for the ninth time in 10 weeks, according to the American Association of Individual Investors.

That ambivalence has led investors to buy so-called safe-haven investments such as Treasury bonds and gold, rather than riskier assets such as stocks.

Prices for immediate delivery of gold recently rallied to $1,224 an ounce, up more than 10 percent over the prior 30 days. Meanwhile, scared investors have bid up the prices of the 10-year Treasury note, pushing down yields to 1.7 percent recently versus 2 percent a month ago. Prices and yields of bonds move in opposite directions.

“Sentiment continues to be bearish about the the markets and stems from the concerns that the economy struggles to find a growth footing,” says Terry Gardner, a portfolio strategist at C.J. Lawrence investment service in New York.

Yes, the U.S. economy is growing, but the growth is relatively weak.

Investors want the economy to be robust enough to push the earnings of companies higher, Gardner says. Some growth in earnings has been driven by companies buying back their own stock — when there are fewer shares outstanding, the earnings per share increases even when overall profits are static. That is basically financial engineering.

A broad negative economic outlook for the global economy is a big part of the problem, says Art Hogan, chief market strategist at Wunderlich Securities in New York. That includes the dramatic slowdown in China, the possibility that Britain may leave the E.U., and the increased frequency of central banks setting interest rates below zero, he says.

There is also a general worry about the low price of crude oil, which is seen as a barometer of global economic activity. Oil is selling for about $33 per barrel, a drop from more than $100 in 2014.

If you think that oil is truly a gauge of economic output, then a drop of approximately 70 percent in prices would seem dire.

The icing on the cake would be the increased military activity in the Middle East, an increasingly antagonistic Russia and China’s push to gain territory in the South China Sea.

The result of all this bad news is fear.

The CBOE Volatility index (ticker: VIX), or the so-called fear index, measures how much investors will pay for protection from falling stock prices. It has increased significantly in the past few weeks, rising from 15 last December to nearly 30 in February. The VIX is currently about 20.

So should investors be afraid? Probably not.

“From an investment standpoint, negative sentiment is actually a good thing,” says Jack Ablin, chief investment officer at BMO Private Bank in Chicago. “Panicky investors have very low expectations.”

When those low expectations are exceeded, then stock prices can often rally.

Ablin has studied what happens to the broad market following low sentiment readings since 1988. He says that when the AAII sentiment is in the most bearish 10 percent of historical readings, the Standard & Poor’s 500 index rallies by 7.9 percent in the next six months, on average.

When sentiment is in the top tenth of readings, or very bullish, then the S&P index gains 2.7 percent in the next two quarters.

Ablin says current readings are in the 14th percentile, up from less than 10 percent in mid-January.

“Bearishness was so widespread two weeks ago,” Ablin says. If the relationship he found in the data continues to hold, investors might be wise to increase their allocation to stocks.

For anyone following the stock market on a daily basis, it’s easy to get discouraged by the negative tone. But that’s the last thing investors should do.

Selling when sentiment in the market is bad and stock prices are low just means you ensure that you will have losses. “If you watch the short-term sentiment you can ruin your company,” says Philippe Couvrecelle, founder and CEO of London-based iM Square, which invests in asset management companies.

Couvrecelle says the best approach is to look at the long-term outlook for companies that generate cash and look to buy stocks at good prices. “Of course, it was difficult in February, but it created opportunities for us,” he says.

More from U.S. News

10 Out-of-the-Box Ways to Save Money

Avoid These 8 Rookie Investing Mistakes

8 ETFs for Investors Who Love Value

Why Is Investor Sentiment So Bad? originally appeared on usnews.com