A Potential Sign that A Market Sector is Near a Top
Many of you may remember that about 8 years ago, every fund company under the sun was rushing to promote their latest & greatest Internet fund that was going to shoot to the moon. Soon after, the Internet stocks collapsed, and these funds no longer drew any interest.
Fast forward a few years and the fad had become real estate funds. Again, it appears that many of these funds were launched right at the top of the market for that sector. A recent article in Morningstar comments on this trend.
This is similar to the taxi cab indicator, where it is thought that a market top may be near if every taxi cab driver is touting his success trading stocks.
Where is there a lot of attention from the fund companies these days? It seems that emerging markets (sometimes called "BRIC", for Brazil, Russia, India and China) are the hottest places to invest in the mutual fund world right now. I advise some caution before jumping into these funds, as these markets have had remarkable run-ups in a short period of time.
Fast forward a few years and the fad had become real estate funds. Again, it appears that many of these funds were launched right at the top of the market for that sector. A recent article in Morningstar comments on this trend.
This is similar to the taxi cab indicator, where it is thought that a market top may be near if every taxi cab driver is touting his success trading stocks.
Where is there a lot of attention from the fund companies these days? It seems that emerging markets (sometimes called "BRIC", for Brazil, Russia, India and China) are the hottest places to invest in the mutual fund world right now. I advise some caution before jumping into these funds, as these markets have had remarkable run-ups in a short period of time.
Powered by ScribeFire.
Comments