The Wall Street Journal reports:
To defend—and profit—from a big rise in inflation, investors have piled into gold or inflation-protected bonds. In November, investors put $2 billion into inflation-protected mutual funds and exchange-traded funds, according to Morningstar Inc. Another $3.9 billion went into commodity funds and commodity exchange-traded funds, primarily gold funds. So far this year, those categories of funds have raked in $59 billion. In contrast, investors have pulled $52 billion from U.S. stock funds and U.S. stock-focused ETFs.
With the inflation trade garnering so much attention, true contrarians must strongly consider the idea of deflation, at least over the short term. As Jim Rogers said last week, “when everybody is on one side of the boat, invariably you should run over to the other side.” Either that or just get the hell off the boat all together.