Safe-haven assets continue to remain extremely popular among flock investors. TLT is close to its all-time high price. Even the US dollar index is at a two-year high. These days the greenback is considered the safe currency. These two safe-havens are likely to be the biggest casualties during the next few months as risk assets recover. Consider this a great selling opportunity for U.S. Treasuries if you are holding a long position. Any additional downside of equities is a buying opportunity. There is a good chance that some of the major indices will reach new four-year peaks during the next few months. It will catch everybody by surprise.
The skeptics believe this is a bear market in formation, and that the mess in Greece, Spain, and Portugal is going to affect the US equities in a major way. Bear markets usually start when nobody expects it. Presently everybody expects that the stock market is on its way down, especially because we are going into the summer months. However, some very experienced and successful investors, as well as corporate insiders, are betting on the market going up.
Flock investors cannot emotionally allow themselves to buy into extended weakness. Even fund managers and hedge fund professionals cannot buy because their computer programs and charts do not indicate a change in the trend. By the time they get the go-ahead to jump in, they have missed 70% of the gain.
It is rare that any investor, investment advisor, or money manager is emotionally prepared to buy into extended weakness or to sell into strength. Those who do so will consistently succeed.