Here is a great example of why you take a very credible name like J.P. Morgan analyst and not get affected by it, when they recommend buying the most overbought sector in the market, the defensive dividend paying stocks, at this juncture. You may find the following article an interesting example.
This blog appeared in MarketWatch website on April.02.2013: Keep playing defensive shares, J.P. Morgan advises
You will have to repeatedly tolerate going against media brainwashing and accepting adversity which can sometimes be dramatic. Keep in mind that you’ll generally experience most of your profits when very few people you know are enjoying similar gains. You must also respect the past, since it is by far the most accurate guide you will find to the future. The current drama will always seem to be unique, but it will actually be a repeat performance of something which has been repeated many times before with a slightly different cast of players.
Bear in mind and respect the fact that the ratio of insider buying to insider selling has been severely deteriorating for most household high-yielding equities. Speculators have been eagerly selling short those assets which are the most likely to rebound the most in percentage terms, the cyclical shares, while most aggressively buying those assets which will be the worst performers during the next half year, the defensive shares.
We continue to believe that the shares of commodity producers will dramatically outperform the broader equity market during the next several months while the highly popular dividend paying assets of Dow Jones and S&P 500 progressively underperform. This is occurring as we transition from a four year equity bull market to an equity bear market.