We’ve commented a few times about the interesting phenomenon of investors ramming cash into bond funds, despite some of the lowest yields ever. According to Mark Hulbert, the trend, far from being over, is still accelerating. Investors actually took money out of stock funds last month, while continuing to stampede into bonds.
Here’s a real mind-bender: a survey of bond fund managers indicates that they expect prices to fall! A recent Bloomberg article notes, ”a survey of investors by Ried, Thunberg & Co. shows fund managers turned more bearish on Treasuries. The company’s index measuring the outlook through the end of 2009 fell to 45 for the seven days ended Oct. 9 from 46 the week before. A figure below 50 shows investors expect prices to fall.” The bond managers surveyed handle $1.5 trillion in assets, so they are probably paying attention.
Maybe things will work out ok for bond investors, but does it seem wise to shovel money into an asset where even the person investing the money thinks you will lose it?
