Home > News & Commentary > Shying Away from Risk

Shying Away from Risk

Great article in Barrons, by their Techincal Analyst Michael Kahn and found here, that draws attention to the growing flight from risk.

The premise is that investors, during the course of this rally but increasingly as equity values have grown, have been struggling to find value in risky assets and have been moving money into risk-free treasuries. Kahn draws attention to the treasury/corporate bond etf ratio, which recently broke out and is rising again, indicating money flow from corporates in favor of treasuries.

This trend is interesting, because it puts in context all the comments that investors and traders have been making about the mountains of cash that is still sitting on the sidelines. If investors are taking the money that is already invested in risky assets and moving it into relatively low-yielding but risk-free treasuries, then they certainly aren’t putting in any new money. Yet again more evidence that this rally is running into some significant overhead pressure.

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