The Next Bubble

Where will the next flow of funds and asset bubble occur for conservative money? Money markets & managed bond funds now have a risk to lose their $1.00 stable price. At the same time the yields are dropping. I think the next investment arena will be equities that pay dividends. This could be the investment theme of 2008. What do you see as the "next best thing" in conservative investing? Hedge funds? Other? A lot of money could be getting ready to flow. ===================================== Phase 1 The identification of this asset class as being the "next best thing". (In today's world, I would agree) Asset allocation shifts would start to occur towards dividend paying equities. Congress & the Fed push to keep the lower tax rate on dividends to save the market. Phase 2 Companies would see the benefit of dividends to increase their share price. Companies would then promote adding dividends or increasing dividends. (Which is a good thing instead of imaginary growth that goes "poof" one day in the future) Phase 3 Share prices get bid to the point of minimal yield and overvaluation. (copy the housing market bubble road map) Justification will occur by saying the dividends will increase 'x' over the next 'x' years to justify the overvalued share prices today. Phase 4 This phase would be the realization that dividends cannot grow enough to justify the share price 'x' number of years out. Only those that bought early will be "in the chips" with yield and those that bought late will be left out. Phase 5 If other investment options are out there, crash! If not, this is a long term sideways market.