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There’s another bubble brewing right under our noses.
Investors, despite fresh memories of two equity bubbles in the
matter of a decade, continue to make highly emotional decisions
when it comes
to investing. This new bubble, however, is not in
the stock market.
It’s in the bond market.
Through October, investors have sent $306 billion to bond
mutual funds, while withdrawing more than $20 billion from
equity funds.
When the herd moves in such a pronounced way, prudent
investors must ask themselves: “Why is everyone doing this?”
And more important: “How can I profit from it?”
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