If They Want the Green Shoes, Sell 'Em the Green Shoes

Not a surprise about the general state of the muni market, but not good:

New Hit to Strapped States

To toot my own horn for a moment, here's a quick look back at an excerpt from this October Post:

Meanwhile, consider this FACT: I hear constantly from fund industry wholesalers that the only thing they can sell-- the only products stockbrokers around the country are comfortable buying for clients-- are bond funds.

Oh. My. God.

So, by the way, those are precisely the types of products that fund companies are giving them! Literally, there has been an explosion in bond product offerings over the last 18 months.

Investing public: you're about to get whacked. Again.

The point I was trying to make was this: the mutual fund industry is a sales machine, not an investment machine. Their perpetual motto is something akin to, "If they want the green shoes, sell 'em the green shoes."

In other words, they'll allow you to aggressively top-tick the market if that's what you really want to do. And it was... in the aftermath of the financial collapse you wanted the "safety" of bonds, so the fund industry gave it to you-- big time.

The historic bond bubble that recently peaked may take a lot longer to unwind than some expect, but still... if you haven't yet done so, it is definitely time to examine that wardrobe closely and think long and hard about whether you really need all those green shoes.

very interesting, but i very interesting, but i would like to know more about this. is it possible? dissertation Submitted by portland on Sun, 2011/01/16 - 2:45pm » reply |