Boots's pension fund caused a stir a few months ago by switching its entire portfolio into bonds and HSBC expects that British pension funds will move from their present 70 per cent weighting in equities to about 50 per cent.The more that funds shift the greater the drag on share prices and so the greater the pressure on funds to shift. The pressures to do so have been increased by tax changes made by the Chancellor – the stealth tax on dividend income introduced in the last Parliament.The shift to bonds will have been given further impetus by the humiliation of the vast majority of investment analysts, who not only failed to warn of the danger of a bear market but actively tipped shares of companies that were about to collapse. There is more than a suspicion that analysts were influenced by the fees the investment banking side of the business was earning giving corporate advice.Might this switch to bonds mean that investment will become more routine, more boring? Well, no, because the opportunities for thoughtful investment in bonds are now probably greater than the opportunities in equities.The great advantage that investors in bonds have over investors in equities is that their relative price is determined to a large extent by the rating agencies. The rating agencies operate on a mechanical, rear-view mirror basis.

By applying equity-style analysis to the bond market it should be possible to spot poorly rated corporate bonds that are backed by perfectly sound companies. Conversely, it should also be possible to give an early warning when a company is about to suffer a deterioration in its financial performance, and accordingly put its bond-rating at risk.Of course this assumption that equity-style analysis applied to bonds will lead to above-average returns does presuppose that the analysts are independent – but then expect independence to be increasingly prized in the years ahead.So the messages of this longer story of the great bear market are two-fold. First, investors have faced the most serious challenge for a generation to their core assumption that equities offer better long-term returns than bonds. It may well be that quite often in the years ahead equities will indeed produce higher returns than bonds. But the post-1950s consensus in favour of holding the majority of a portfolio in shares is broken.And second, the credibility of the professional investment community is shattered. Very highly paid analysts advised investors to go on buying Enron shares when the company was about to go under.

You cannot do that to people and expect to be trusted next time.And so this year all the mainstream houses are predicting that shares will end higher than they began They probably will. But the people saying this are the same people who said the same last year – and were wrong – and the year before that – and were wrong.The great divide in the investment community is between bears and bulls, or between equity enthusiasts and bond buyers. It is between advocates and judges.The place is full of advocates: clever people who create arguments to buy (and very occasionally) to sell shares. There are far fewer judges: people who are paid for their long-term nose about the likely performance of investments.For the last couple of decades power has been with the former. Expect this experience of two years of falling prices to start to shift power back to the latter.And expect this shift to carry on for – who knows? – maybe another couple of decades About time too.. Britain's policy approach to the euro has so far been similar to its early approach to the common market – that is one of denial followed by a belated scramble to join in.