In a recent Barron’s article, financial analyst Mark Hulbert wrote that many of the investment advisors he monitors on a regular basis are concerned that high interest rates will entice investors to move their dollars from equities to bonds. He cites the so-called “Great Rotation” theory that emerged in 2011 and predicted a huge shift from bond funds into equity fund as “investors came to appreciate the near certainty that interest rates would eventually rise… Read More
“Davos Man,” the hypothetical investor who gravitates toward global businesses and bonds has been ruling the roost for the past decade, but he might be passing the baton to “Joe Six Pack” investors, which focus more on mainstream, domestic assets. This according to a recent Globe and Mail article by Validea CEO John Reese. The article discusses the notion of the Great Rotation theory– the idea that the financial assets that thrived during the last… Read More
While many believe the start of a “Great Rotation” from fixed-income assets to stocks has been helping fuel the stock market’s gains, the reality may be that a different type of rotation is occurring. In an article for The Fiscal Times, Suzanne McGee notes that, according to data from fund flow tracker Lipper, flows into bond funds haven’t plunged as flows into stock funds have increased. “Indeed, there have been times when inflows into bond… Read More
The “Great Rotation” — the expected move that investors will, at some point, make from bonds to back to equities — has been used as a reason to be bullish on stocks. But Mark Hulbert says that reasoning may be flawed. “I suppose it is conceivable. But a careful review of historical fund patterns doesn’t provide much support for this so-called Great Rotation argument,” Hulbert writes for MarketWatch. He says that at the end of… Read More
Many have said that the influx of money into bonds in recent years means a “Great Rotation” could occur — in which money pours back into stocks as investors’ risk appetites increase — and give stocks a big boost. But in a recent client note, Gluskin Sheff’s David Rosenberg says that thinking is way off base. “Our own empirical research points to little more than a marginal statistically significant relationship between the general public’s appetite… Read More