JPMorgan’s ‘Great Rotation II’ Thesis Hits Roadblock: Retail Investors May Be Maxed Out

JPMorgan’s ‘Great Rotation II’ Thesis Hits Roadblock: Retail Investors May Be Maxed Out

Last month, JPMorgan outlined a call for a big shift in investor positioning into stocks and out of bonds in 2020. That would mark a break with 2019, a year defined by fixed income flows despite the run-up in equities. “We look for 2020 to be the year of Great Rotation II, in a repeat of 2013 the year of Great Rotation I”, the bank wrote, projecting an epic pivot. (The following chart is current through December 15.) While it's far too early to take stock (and there's a bad pun in there
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3 thoughts on “JPMorgan’s ‘Great Rotation II’ Thesis Hits Roadblock: Retail Investors May Be Maxed Out

  1. Retail in general are over allocated to equities based on average risk tolerance. I am an ria and speak to retail investors often. While not a random sample, most individuals are pretty far out on the risk curve between allocations to credit products like corporate bonds. The next correction in stocks is likely to show this

  2. Anecdotally I know very few people not full up on equities. Very little cash and bonds. It is honestly insane. And they are giddy and arrogant with no understanding of why the market is up as much as it is and how much risk there is. They were like this in 99 and though fully invested in 07 not as giddy and confident as today (or 99). The less informed an investor is the more bullish they seem.

    A big warning sign but has been for since 2017 (excl the fall of 18 where they were scared but stayed full up).

    Not sure this will end well but when I am stumped. Think it is soon but…………

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