This is what's happening with the 'Great Rotation' in 2023
Jan 05, 2023
The 'Great Rotation' originally referred to the phenomenon of investors pulling money out of bonds and pouring capital into equities.
But, of course, things have changed over the past six months.
Interest rates are no longer stuck at zero, and in 2022 much of the rotation was out of so-termed ‘growth stocks’, and into some of the traditional value stocks and sectors.
Many of the high-growth tech stocks saw their prices annihilated last year, in fact, with many recording declines of 70 to 90 per cent.
The Federal Reserve appears set to take the Funds rate up close to 5 per cent, while the ECB and other central banks seem likely to be going to around the 4 per cent level.
So for the first time in around a decade, investors can actually get paid to be patient.
As you might expect, this will make a significant difference to the outlook going forward, and to how different cohorts approach the changed environment.
I took a look at what that means in this short video here.
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