This past week, the yield curve has become flatter from three months to ten years. At the same time, bond quality spreads that measure investor confidence have registered fear in the marketplace. Equities, until today, have ingnored this bad news from the fixed-income market.

I think that people are finally taking capital gains in equities and locking their stellar year-to-date return. (Please see the Feb. 21 entry on this blog regarding the behavior of professional money managers at the end of the first quarter of the year.)

It might be a good idea to do likewise and re-invest after the end of this quarter.