Will Funds Engage in Panic Buying or Lock in Profits?
Things will likely not be boring in the markets going into year end. After such a large run, clients are desperate to participate and portfolio managers are under pressure to show that they have participated. That said, one could make the argument that fund managers sitting on large gains will be desperate to lock in profits and avoid giving up ground going into year end. It is hard to say which will occur, but my bet is that we are due for a large move heading into January. If cornered to choose a side, I would bet on further strength into year end because of favorable seasonality and the overall feeling I get that profit desperation outweights caution. So strap on your seatbelts and get ready for a wild ride!