As Stocks, Bonds and Gold Fall, Where’s the Cash Going?

June is when spring turns to summer, but this year it’s felt like fall for investors in nearly every market.

Bonds have tumbled in value, from Treasuries to corporate debt to municipals, as the focus on a possible end to the Federal Reserve's asset-buying prompted heavy withdrawals from fixed-income funds. Gold is collapsing and is on its way to posting the metal’s worst quarter on record. Non-shiny commodities have also been weak. Emerging markets have led the declines, as China’s banking system heaves. Stocks are down from their highs of May, though they’ve bounced the past couple of days.

 This recent across-the-waterfront swamping of most every investment market raises two key questions: Where is the money that is exiting these assets going? And what happened to the balanced interplay among markets that produced offsetting movements and flattered a diversified portfolio? (more)

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