As we listen to the common investment advice today, in addition to observing where money is flowing, equities seem to be a much disliked asset class, while gold comes highly recommended and government (as well as other types of) bonds are being driven to all-time low yields. Of course, much analysis complements these recommendations. At NFI, we can’t help but think there is a strong possibility that investors are — perhaps unwittingly — extrapolating the recent past:

Gold – 10 Year Chart

10-Year Treasury Yield – 10 Year Chart

S&P 500 Index – 10 Year Chart

To be clear, we do not purport to be predictors of future returns, especially in the near term. However, we believe investors should be careful with their assumptions.