Are Traders Becoming a Bit Too Speculative?
Rising speculation coming out of an oversold market is a good thing, since it keeps people buying and prices rising. But at some point it becomes too much...
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.
Click to enlarge
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