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Mutual Fund Managers Become Pessimistic





Apparently, everything from this point on is heading downwards. Have you prepared your portfolio for this?

From WSJ:

Increasing concern that the global economy is weakening has prompted more fund managers to shift assets into bonds, according to a survey of managers taken in early August.

The number of fund managers saying they believe global bond markets are overvalued fell to a net 22%, from 35% a month ago and 48% in May, found the survey of 209 fund managers that run funds with assets of $637 billion. The survey was conducted by Merrill Lynch & Co.

...

Around 70% of survey participants said that they believe that the global economy will deteriorate in the next 12 months, compared with 60% who took this view in July.

"The big call this autumn is shaping up to be: Will this liquidity be directed back into equities, or could it head for the bond market instead?" said David Bowers, an independent consultant to Merrill Lynch on the monthly fund-manager surveys.

He said that how investors respond to this question may reflect whether they expect the Federal Reserve to be more concerned about the risk of inflation or the risk of slower growth.

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