In order for a bear market cycle to take its full course, we must reach a stage during which investors hate stocks. At this point, demand will hit a trough and the stage will be set for strong future money flows into the market.
Clearly, demand for fixed income investments has far exceeded that for stocks. However, now I am starting to hear neighbors and locals talk about how they are “finished” with stocks and have been putting their money into bonds. Is this the first sign of “If your neighbor gives you an investment tip, we’re marking an important moment in an investing cycle?”
As with tech stocks and real estate investments, fixed income securities can remain in vogue for years before the trade becomes overcrowded. However, I see it as a very healthy sign that we’re moving in the right direction through the healing process. Take a look at the classic “Psychology of a Market Cycle” and let us know what you think:
Click for Larger Image