Where do Investors Hide ?
As the market unravelling moves forward the big question is where do investors hide. As our interest rate adjusted charts show, the ones that we have presented over the past couple of weeks, the first move was into various bond products on May 15, then on April 30, the move into commodities started, the so called infrastructure trade, and then today the move into Gold has started.
This will be an interesting period to watch, as investors have been riding the FED money train and little analysis was apparently required. The next point to watch is when inflation pushes interest rates higher, this will not be good for the three current hiding places, bonds, commodities, or gold.
Keep in mind that the analysis going forward will need to dial in the move away from P/E multiples that probably will not survive a move away from a Speculative environment and into a Growth environment. How difficult will it be for investors to handle rising sales and declining stock prices at the same time?