Investors Chasing Yield, ‘Greed Vs Fear’

Investors Chasing Yield, ‘Greed Vs Fear’

Investors Chasing Yield, ‘Greed Vs Fear’

$SPY, $GS

Investors are enjoying the 2nd longest Bull Market in history are now motivated more by a search for yield than concern that another correction could be coming.

Note: A market correction is seen as a Southside move 8 – 12% off of a marked high.

“We’re down the road in the cycle, so there’s certainly places where people are further along the greed spectrum than the fear spectrum,” Goldman Sach’s President David Solomon said Monday on TV.

“In an environment where money has been so inexpensive for such a long period of time, there is no question that people have been reaching for yield.”

US stocks have almost 3X’d in the past 9 years, while the Fed kept interest rates near all-time lows. Now the FOMC has start to raise rates at the ‘window.”

History shows “markets often reprice more abruptly than people expect”.

While he said it was hard to predict the timing of the next correction, Mr. Solomon said he sees signs of greed, not just in the bond market but in some stock valuations.

“People have been reaching for growth, and if you look at a bunch of these growthy companies and the value that people will pay for forward growth has been very high,” he said. “At some point that may correct.”

To me it looks toppy in here as there is distribution happening in the recent 8.6% correction and the Key index pattern triangles come to points.

Stay tuned…

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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