I see two critical phenomena taking place in the market right now... And I hope people will pay attention to them. No.
1, the retail investor has returned to the stock market in a huge way.
If you look at mutual-fund inflows, they're very powerful. In October,
U.S. equity funds had net inflows of $10.5 billion, the highest monthly
inflow since January. These inflows are the biggest influx we've seen
into stocks since 2007. Unfortunately,
I believe the retail investor is late to the party. Too much money is
going into stocks right now at too high of a price. This is not the time
to be buying stocks. You want to be buying stocks when other people are
selling them, not when everyone in the world is buying them.
I sincerely thought the market top was being made in early June and
in May when the junk bonds peaked and yields fell to less than 5%. I've
been early on that call. Nevertheless, I don't think it's going to end
well for the retail investor. (more)
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