Now in its 123rd year, the National Geographic Society continues to put out high quality content, online and in its magazine with the iconic yellow border.  The November issue featured some of the great migrations of the animal kingdom.National Geographic Magazine | This is the online version.  There also is a seven-part television series on the topic. Whether it’s the more than forty thousand miles flown by the arctic tern in its migration or the prairie rattlesnake, which travels a mere five, many animals move with a persistent regularity.

The map accompanying the magazine categorizes the types of migration as latitudinal, altitudinal, rain-driven, or reproductive.  In contrast, the great migrations that occur in the investment ecosystem are largely economic and attitudinal.

There are those mass migrations that we like to call “bubbles” and the flights of aversion that occur in their wake, which are thought to be unusual but which are now spotted with increasing frequency.  However, unlike the predictability of the animal migrations, those of humans might have tendencies, but they don’t follow patterns that are predictable.

Therefore, a strategy like sector rotationThe Big Picture | Here’s one basic example, courtesy of Barry Ritholtz. might make sense, because certain stocks tend to work in different parts of the stock market cycle (and/or the economic cycle, depending on the rotation strategy used), but figuring out where you are is never as easy as it sounds.  The elements of the rotation manifest themselves in different ways, with the time in one phase changing significantly from example to example, and the intensity of the moves varying considerably.

You often see market advice that counsels action based upon the calendar.  For example:  “It’s May, it’s time to take to the highlands for the summer.”  While such a routine interpretation might turn out to be “right” from time to time, it isn’t always.  Animals may head to the highlands each spring as a part of their normal cycle of movement, but asset prices resist that kind of regularity, despite our attempts to identify it.

There are changes in circumstances, both natural and unnatural, that can trigger a migration.  Animals that face a paucity of food during a season of drought are compelled to seek it elsewhere, even if that means greater exposure to predators.  Similarly, today’s yield-starved investors have grown weary from the lack of return on conservative strategies and are taking more risk.  That is exactly what the monetary authorities want them to do.  Unfortunately, some people should be taking more risk and some shouldn’t.In addition to its potentially deleterious effects from incenting people to take risks that may not fit their situations, I think that the policy framework is ill-conceived and will contribute to increased instability going forward.

We are at the point where a better economic environment, challenging personal economics for many individuals, skimpy returns on low-risk strategies, and changing investor psychology (portfolio envy is back) could lead some investors to a land where they don’t belong.

There are many species of investors and their migratory patterns differ dramatically.  But unlike the migrations of the animal world, where the movement of one breed is usually not affected by those of more than a few other species, the great migrations of the investment world can lead to an intermingling of different types of investors, all heading in the same direction.

The challenge of the next weeks and months will be to decide whether to stay with the herd, now building rapidly, that seeks the green pastures of a “risk on” world.