Are Traders Becoming a Bit Too Speculative? Jason Goepfert Oct 09, 2007 12:30 pm |
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Whenever one sector or asset class greatly out-performs others, it tends to generate a lot of interest among traders – we all want to be involved in what’s working now.
Tech has been an obvious out-performer of late, and predictably that has sparked interest among those looking to put money to work. More specifically, the internet group has been very hot, so we’re starting to see money flowing there. And it might be overdone.
The reason is because money flowing into the group seems like it has crossed the line into “too much, too fast”. One way to see that is to look at the assets going into the Rydex mutual funds.
That fund family has the Rydex Internet Fund (RYICX) available for its investors, and they release the asset levels in the fund daily. I’ve plotted the past few years of those assets against the NAV of the fund below.

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Jason Goepfert is president and CEO of Sundial Capital Research, Inc., which publishes sentimentrader.com. Prior to founding the firm, Mr. Goepfert managed the operations of a large discount brokerage, then the operations of a $1 billion hedge fund. For more of Jason's commentary, visit sentimentrader.com. He also welcomes your comments and feedback at Jason@minyanville.com.
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