Don’t laugh, here’s why the ‘great rotation’ from bonds to stocks could finally happen in 2020

davfor

My baseline assumption for 2020 is that the economy will continue to chug along, the stock market will tag along by meandering upward by some amount, and bond yields will creep upward at least a little. This article suggests I should keep my eyes open for a couple of catalysts that could usher in an end to our "never ending" bull market....

Stop us if you’ve heard this one before: After years of bond- and money-market fund inflows and equity-fund outflows, investors grow fearful of a rebound in yields and the potential for capital losses in fixed-income, sparking a “great rotation” out of bonds and into equities......such a phenomenon has marked the “late innings” of “all great bull markets,”...... And the current run-up from the March 2009 low is unlikely to be an exception.

“After almost 11 years of equity market rally off the 2009 low, it is futile not to call this a ‘great bull market’. It is,” Emanuel wrote. “And the public will ‘fall in love’ with stocks once more — potentially sending prices materially higher from these already ‘commanding heights’ — before the bull market ends.”.

https://marketwatch.com/story/dont-laugh-heres-why-the-great-rotation-from-bonds-to-stocks-could-finally-happen-in-2020-2020-01-02

Graust

Thanks for the article @davfor. Interesting things to think about. I really liked “the most hated bull market in history.” The end of the stock bull, and the rise in interest rates are two of the most trumpeted ideas since after the Taper Tantrum.