The Great Rotation or April Fools?

Reporters and Wall Street strategists alike have stumbled upon a new catch phrase—“The Great Rotation.” This follows other recent favorites including “The Financial Crisis,” “Great Recession” and “New Normal,” each meant to encompass a broad definition of a particular market environment. The most recent moniker is based on the supposition there will soon be a reversal of the outflows from equities to fixed income that began in the aftermath of the 2008/2009 downturns. While the notion of a “rotation” from fixed income into equity investments is reasonable, such a reversal may take longer and be of lesser magnitude than some suggest.