What is hapening between bond and stocks?

[hajimow]

What we hear from the media that huge money is coming out of bond market and is being invested in stock market. I just had a talk with one of my friends who works in a very big mutual fund company. He told me that now many investors are just doing the opposite. He said this trend accelerated a week ago and people are taking their money from stocks and putting into safe cash or bonds. They are afraid of losing what they have got in the last year. He also said even investors are encouraged to do that by their finacial advisors. That was interesting to me and I believe it makes sense and I wanted to share this interesting news with you.

 

[tradingjournals]

And to whom did they sell their stocks? If those who bought their stocks are also members of the general public, what could one conclude about your friends' IQ?

 

[hajimow]

Quote from tradingjournals:

And to whom did they sell their stocks? If those who bought their stocks are also members of the general public, what could one conclude about your friends' IQ?

By the way the last days before the correction, you will find more buyers which are from greedy crowds. It is a human nature. But many people who already have made money are pulling their money out of the market.

 

[HopelessTrader]

http://news.yahoo.com/weekahead-great-rotation-wall-street-fairy-tale-073517560--finance.html

 

[riskaddict]

"Bonds" is a little vague. If these people are buying treasuries I will gladly take the other side of that trade. Rising rates seems like the most obvious macro play for the next 2 years. Do these people think you can't lose money buying bonds??

 

[Mercor]

Quote from riskaddict:

"Bonds" is a little vague. If these people are buying treasuries I will gladly take the other side of that trade. Rising rates seems like the most obvious macro play for the next 2 years. Do these people think you can't lose money buying bonds??

Not if they hold them to maturity.

 

[riskaddict]

Quote from Mercor:

Not if they hold them to maturity.

LOL Maybe I should start selling annuities.

 

[hajimow]

I believe many investors are selling stocks to see a pullback of 10% and then reinvest. They can park their cash in a short term bond fund that can lose 1% (I know they can lose more in short term) or even in money market. Another news that a kind of confirms what is happening behind the scenes.

http://www.marketwatch.com/story/insiders-now-aggressively-bearish-2013-02-06

 

[hajimow]

Quote from HopelessTrader:

http://news.yahoo.com/weekahead-great-rotation-wall-street-fairy-tale-073517560--finance.html

That a kind of confirms what my friend is observing in his mutual fund company. The article was talking about the money inflow in the first 4 weeks of the year while my friend's data is for the first week of Feb. Both can be right.

 

[hajimow]

I bet my life that if the market sees a correction, you will see all these analysts and mutual and hedge fund managers coming on TV and saying that they sold most of their positions at high of the market :eek: