The stock market is now almost entirely divorced from the real economy.
The huge and almost unabated rise in the stock market the past few years, including during Trump's presidency, can be tied to the federal reserve endlessly creating more and more money out of thin air. That money is largely injected into the stock market. Thus stonks only go up or whatever they say over on wsb.
I fear we're in for a crash of epic proportions when this house of cards starts falling.
The danger that investors (including me) have is that everyone is expecting the economy to recover. However, that has already been priced into stock prices, meaning that any delay in economic recovery (even if recovery is indeed occurring) will act against the market. The shakeups that we're experiencing right now is reflective of that. I think the bull market will continue throughout 2021, but the real shakeups will start happening in 2022 when the euphoria of resuming normal activities dies down and we're left with a massive bill (lost revenue, inflation, over-valuated stocks). Not sure if the market will crash, but corrections are certain.
Well a potato head is president , so what does anyone expect!
The stock market is now almost entirely divorced from the real economy.
The huge and almost unabated rise in the stock market the past few years, including during Trump's presidency, can be tied to the federal reserve endlessly creating more and more money out of thin air. That money is largely injected into the stock market. Thus stonks only go up or whatever they say over on wsb.
I fear we're in for a crash of epic proportions when this house of cards starts falling.
The danger that investors (including me) have is that everyone is expecting the economy to recover. However, that has already been priced into stock prices, meaning that any delay in economic recovery (even if recovery is indeed occurring) will act against the market. The shakeups that we're experiencing right now is reflective of that. I think the bull market will continue throughout 2021, but the real shakeups will start happening in 2022 when the euphoria of resuming normal activities dies down and we're left with a massive bill (lost revenue, inflation, over-valuated stocks). Not sure if the market will crash, but corrections are certain.