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Investors rush to buy equities, dump gold in vaccine euphoria

Citing data from EPFR, the bank said inflows into global stocks in the last two weeks soared to $71.4 billion, the biggest ever. The flows were led by U.S. and emerging market stocks.

Still, investors were not ready to pull the plug on high-flying technology stocks, which saw $2.4 billion inflows last week. BofA said the feedback was “we’re on it (the rotation to value stocks), but we ain’t selling tech”.

Value stocks, typically companies that are more sensitive to economic cycles, have been soaring since Pfizer’s announcement earlier this month of positive data from its vaccine trial, raising hopes of an economic recovery.

Advances in market indices have broaden to smaller caps and overseas. If this a forward looking view of 2021, perhaps there is light at the end of the pandemic tunnel. What do you think?


  • edited November 2020
    Thanks @Sven for the story. I always enjoy these hyperbolic headlines. Crash is too strong a word if you compare the price of spot gold now with one year ago. But it is such a volatile market you probably can argue in either direction based on the dates chosen. As for the recent sell-off? It could be a lot of newbies added gold to portfolios prior to the election and than sold all or some of it sometime after.

    As the chart shows, gold near $1900 today is still about $400 higher than a year ago when it traded under $1500. That’s a 20+% gain over the past year. Yes, it topped $2,000 - but only briefly. I think a lot of investors got in before the election and perhaps sold after.

    I have a small toe-hold in OPGSX, which invests in miners. It’s gained 46% over the past one year - again making it difficult to apply the word crash. Bottom line: Gold and / or miners are crazy volatile investments and largely unpredictable.

  • These are click baits to get reader's attention. I have a decent allocation of gold going into this year and it has performed well throughout the year. Sold a bit when it reached over $2,000 an ounce and now is back in mid $1800. I will buy more when the price is right. I agree that new investors got in late before the election and now bail to stocks as they are rising. Now is not a bad time to rebalance a bit and wait for better buying opportunities.

    History will repeat itself as we are entering the second and potentially worse phase of the pandemic. Now is just a pause and it is likely to rise again as panic sets in just like in March this year. When grocery stores are emptying out toilet paper, flour and can goods, you know what is coming. Some states have imposed curfew hours and closing bars and restaurants. Our state tried to reopen our schools but reclosed them as too many kids are infected.

    My take is that countries that have their COVID pandemic well in control will move forward with their economies in 2021. And US and Europe will lag behind Asia by 6 months to a year. Guess where the more compelling investing opportunities are?
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