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The Great Rotation to stocks- Unlikely

The Great Rotation, where investors would move away from bonds because of low yields to stocks will not materialized. According to Pimco’s executive vice president, Tony Crescenzi the volatility of the stock market and the lingering effects of the 2008 financial crisis on the American psyche will not shift funds to stocks. Even though, long-term bonds are not highly attractive right now, older Americans will not risk their wealth on the uncontrollable moves of the stock market.

Most of the wealth in America is concentrated at the latter stages of life. The rising stock is tempting, but older Americans are too risk averse.