Broad market index is buoyed at recent high level with relatively higher trading volume. Market is oscillating and seems to look for a breakout. Dynamics is changing from slow rally to a competition among market participants. Some institutional investors see the significant profit since the bottom in last year and attempt to take profit for part of the investment portfolio. On the contrary, some individual investors who sold part of the investment portfolio during the bottom sees the recovery in the remaining portfolio and dividends in the last quarters. The low return of money market and the possible peaking of treasuries and bond lures them to take more risk in the equity stock market. Opportunistic traders are pushing the movement of market to make profit from the volatility.
Although the long term outlook is optimistic, there is uncertainty in short term market movement. It is not a good time for long term investment. There may be lower entry point which a lot of investors are waiting. There is possibility that market may dip due to profit taking. However, there is a lot of liquidity looking for financial return on the global scale. Any dip would attract support from various investors.
The speculative trading portfolio has new position in stock holding and maintains a bullish holding on leveraged ETFs. However, the trading strategy is more inclined to day trading rather than buy and hold.
The Yahoo! article "Small investors shun stock funds -- and miss the big rally" describes current market.
Individual investors are boycotting the stock market, while hedge funds have regained their swagger after wandering in the wilderness.
"We're at an inflection point where investors are beginning to become more tolerant of risk," Heinz said. "We had been at historically low levels for a long time. Only now are we starting to see investors start to take advantage of opportunities in the marketplace."
Despite the renewed flow of capital into hedge funds, which invest in an array of assets, including stocks, commodities and currencies; the average investor continues to boycott the U.S. stock market.
"Individual investors are willing to take some risk, but not in large cap U.S. stocks," he said.
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