It is undeniable that there has been a rotation into riskier assets in recent months. Hedge fund surveys and actual positioning reports from broker dealers show higher gross and net exposures from hedge funds. Sentiment surveys like the NAAIM & AAII combined with inflows into stock funds show that advisers and the public have had a stronger risk appetite as well. While data on institutions is sparse, I have been hearing anecdotal evidence that they are feeling more comfortable with riskier assets. I believe this is a cyclical rotation seen in the latter parts of a bull market rather than the beginning of a secular move.
The following excerpt on baby boomers comes from Wikipedia:
A baby boomer is a person who was born during the demographic post-World War II baby boom between the years 1946 and 1964, according to the U.S. Census Bureau
... Baby boomers control over 80% of personal financial assets and more than half of all consumer spending
The oldest baby boomer is now 67 years old. By 2020 more than half of baby boomers will be over the age of 65. The vast majority of pension assets are for the retirement of the baby boomer generation. A great secular move towards risk seems highly unlikely to me when the group that controls the majority of assets are heading towards retirement or already in it.
I believe it is far more likely that we are in the latter part of a cyclical bull market than at the beginning of a "Great Rotation" and secular move into risk assets. We have had a four year bull market where the S&P 500 has had a total return of roughly 135%. This "Great Rotation" argument is a rationalization for those who have missed the move to follow their primal instinct to herd. "The Internet Is The Future" was the rationale for throwing caution to the wind during 1999. While the slogan was true the investment implications were disastrous. With that said, the market did not top out for another year after we started hearing that catch phrase.