The Tale of Two Trends

Hello,

It's a fascinating market this summer as two major trends have shown up at the same time to make themselves heard. Bond mutual funds have rallied significantly as the general public has been fleeing to "safety" with yields dropping to major lows (bond prices up therefore yields down).

Simultaneously, the equity market (S&P 500) has hit a record high at 2970 both with the narrative from many that this bull market cannot continue ... as it continues. A colleague of mine, Jason Bodner from MapSignals, wrote this morning that, "Buying as a percentage of all signals is 9% above average so far, and the return is 5.6% above average."

What does it all mean? In very general terms, the public is taking cover in bonds while the institutions are aggressively buying equities. Another Jasonism, "We should look at the mama duck to see where the baby ducks will go, but most investors don't."  

Success in all your efforts,

John

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John R. Kinkead

Vice President of Wealth Advisement