Analysis - The Great Rotation: a flight to equities in 2013

“toward higher-risk higher-reward equities from bonds”

That has been the goal of the Fed Chairman all along.

The problem was that the people who were in the lower risk bonds were there for a reason. THEY COULDN’T AFFORD to put their money at risk and they NEEDED THE INCOME from the lower risk bonds.

Most of the people in the Equity Markets today are Traders NOT Investors.

Imagine a Government forcing a large portion of the population who wisely saved for their retirements to move their money from low risk income producing bonds into high risk equity markets.

Most of those people didn’t move their money like the Fed expected and just took the lower returns or got out of the bonds and spent the money just to survive.

“SLI’s conclusion was that longer-term investors should now shift to the riskier end of the spectrum in equity and real estate with good starting yields”

And wipe out the rest of the poor saps that didn’t get wiped out in the last crash?

Yea good plan.

If Wall Street can average a 50 point increase a day for the remainder of business days in 2013 then the year ending average will be 24,000 plus points. A huge return on your investment.