No one wants to leave money on the table by holding on to cash in their investment portfolio. Especially with the major stock market averages setting new records almost daily. But for the last week or so, it's been tough for investors to avoid a thought of going to cash.
The bond market, though it actually ended its winning streak more than a year ago, is now being talked about more often by bond gurus like Bill Gross of Janus and Jeff Gundlach of DoubleLine Capital as entering a bear market. The 10-year Treasury, of which many market rates are benchmarked, reached its all-time low yield in July 2016. But it was last week that market legend Bill Miller said more money would start flowing into stocks as a result of investors bailing on bonds.
But a funny thing happened on the way to that call. Stocks fell on consecutive days this week due to, yes, the same rising interest rates. Some of the biggest stock market winners dropped $5 to $10 per share or more in just a day or two. Former Federal Reserve Chairman Alan Greenspan said on Wednesday that both stocks and bonds are in bubbles.
If you hear Kenny Rogers in The Gambler singing, "You got to know when to hold 'em, know when to fold 'em, know when to walk away," you are not alone.