This bull market has gone on so long, and there are so many people with enormous unrealized capital gains, that I guess it will take more than a 6% fixed income yield to persuade them to pay capital gains and sock their money away.
Gradually, though, a certain number of long-time holders will cash in. At some point there will be enough new stockholders at higher prices, so that a decline of even as little as 10% might be an inducement to realize short-term losses for tax purposes.
I am not even considering the more reckless speculators, especially people operating on margin at these levels.
But God only knows what will happen if the general market levels sink to a point below which those who have been taking on mortgages, leasing automobiles, and recycling credit card debt can no longer count on their "wealth" to bail them out.
The turning point may come when enough people say, "Hey, here I am down 15% for the year while I could have been ahead 6% in bonds."
Incidentally, AMGdata shows about $3 billion inflow for the past week. Not that these figures ever tell much reliably, but it's the only thing there is week-by-week besides Trim Tabs. As already posted, the decline of money-supply growth is remarkable. |
