Seeking Alpha
Chicken Or Beef? Time For A Stock Diet?

Chicken Or Beef? Time For A Stock Diet?

The stock market has been gorging on gains over the last six years and the big question is are we ready for a crash diet?

In other words, have we consumed too much, too fast? Since the lows of 2009, the S&P 500 index has more than tripled (or +209% without dividends).

In our daily food diets, our proteins of choice are primarily chicken and beef. When it comes to finances, our investment choices are primarily stocks and bonds. There are many factors that can play into a meat-eaters purchase decision, including the all-important factor of price. When the price of beef spikes, guess what? Consumers rationally vote with their wallets and start substituting beef for relatively lower priced chicken options.

The same principle applies to stocks and bonds. And right now, the price of bonds in general have gone through the roof. In fact, bond prices are so high, … 

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