Has the Great Rotation Already Started?

Over the past 1/2 year, we have been constantly hearing of the ‘Great Rotation‘. There is a thought out there that investors are starting to ‘rotate’ their money out of bonds and into equities ($SPX). First off, this idea of a “great rotation” is  a big misunderstanding of markets. Second, the actual “Great Rotation” has been happening in other asset classes.

As Joe Weisenthal of Business Insider argues, there has been a few major asset classes. You of course had equities, currencies and bonds. But you also had Gold and Apple. However, as of late, as the market has been ripping higher, Bonds ($TLT) have not really sold off like everyone would have expected. However, 2 “asset classes” have. You have actually been seeing the “Other Great Rotation“.

The unwind and “Great Rotation” of Apple ($AAPL) and Gold ($GLD, $GC_F) has been occurring over the past few months. Below is a price performance chart of the $SPY, $GLD, and $AAPL, indexed for the week QE3 was announced. As you see, the market is up 9.20% since that date. Apple & Gold? Down 34.35% & 8.73%, respectively. Now THAT’S a great rotation.

$SPY (+9.20) vs $AAPL (-34.35) vs $GLD (-8.73%)




The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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