Where the Big Money's Going in 2012http://www.fool.com/investing/etf/2012/07/09/where-the-big-moneys-going-in-2012.aspx Dan Caplinger
July 9, 2012
Many successful investors have made millions by going against the grain. But before you can do that, you need to know which way the grain is going. With 2012 more than halfway over, now's a smart time to take a closer look at where investors have put their hard-earned money so far this year, with an eye toward figuring out whether betting against them makes sense in the current market environment.
But it's exactly that dynamic that makes looking backward for information so lucrative. By distinguishing momentum-driven moves from apparent value plays, you can often find some popular plays for which it does make sense to join the crowd, while also steering clear of much-loved investments that carry far more risk than most people realize.
The big love for bonds
Interest in bonds may seem ridiculous given their low current yields. But the gradual drop in rates in recent years has given bond funds substantial total returns that in many cases have exceeded what you could earn in a largely flat stock market. Moreover, the popularity of Bill Gross' new active PIMCO Total Return ETF has reinvigorated the space.
With rates so low, however, there's little room left for further capital gains from bond funds. And although low rates could persist for a long time based on current government and Federal Reserve policy, the eventual rises in rates will reverse the gains for bond investors and create what could become surprising capital losses.
Here again, though, relative performance tells the story. Even as China and Brazil have suffered challenges to their lightning-fast growth rates in past years, certain subsectors have held up well. For instance, China Mobile