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Institutional FOMO

Excerpt from the Weekly Outlier Insights Newsletter sent EVERY WEEK. Join for free!

Basic Investing & Trading Concepts

  • A quick overview of institutional money flows indicate a noteworthy shift to risk on assets DESPITE increasing indicators that the recession we're "not in" is likely to worsen into the tail half of the year.

  • Why? Why would large businesses with tremendous resources and assuredly better forecasts than me sitting in my office do that?

  • FOMO. Fear of missing out. During bear markets, it's normal for people to lose money. It's justifiable and reduced down to "difficult markets".

  • However, what is like to cost a fund manager their job, is missing on positive returns during market rallies.

  • Alas, many fund managers are essentially forced into maintaining exposure to the market, so they do not miss any large scale rallies in an attempt to time things.

  • Leading to one of the advantages of retail traders - we have no shareholders, boards, etc to report to. We can deploy as we best see fit. Let's do that.

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