Reuters. One of the big investment shifts of our day may be at hand, regardless of how global markets actually perform this year.
What’s already known as the “The Great Rotation” – a tilting of pension and insurance funds’ strategic, long-term asset preference back toward equity from extreme positioning in bonds – has been one of themes of the new year so far.
The gist of the argument is that investor holdings of now expensive, ultra-low yielding government debt – following a virtually unbroken 20-year bull market in bonds – are ripe for rebalancing. The attraction of relative and absolute valuations in equity will coax the outflow to stocks.