We are once again seeing many American investors retreating from certain equity investments in favor of bonds. Start swimming upstream.
Know when you should
The May 11th issue of The Wall Street Journal (page C1) reminded us again that the average investor is usually too busy following the herd to swim upstream. Swimming upstream can have its advantages.
“Go with the flow” may be great advice in some areas of life, but not when it comes to investing.
With behavioural finance experts demonstrating how and why humans largely zig when we should zag, analysts try to draw smart conclusions from watching so-called dumb money slosh around in the market. On that measure, at least, things soon may be looking up for stocks.” ~Spencer Jakab
The article goes on to point out that, although many investors follow the herd or go with the flow to their own detriment, there may be a genuine shift toward fixed income investments due to the aging population.
Just remember, what’s good for the goose (aging baby boomers) may not be good for the gander (those trying to accumulate wealth).
Until next week,
Susan R. Linkous
Quote of the Week: “People want economy and they will pay any price to get it.” ~Lee Iacocca
Always remember that stock investing involves risk including loss of principal and that bonds are subject to market and interest rate risk if sold prior to maturity. No strategy assures success or protects against loss.