You would never know it by the looks of the stock markets.
I have been thinking about the stock market lately and here are my thoughts:
(1) The price/earnings (P/E) ratios are near historic highs which means that by any rational criteria the market is way higher than it should be.
(2) This means that demand for stocks exceeds the supply—so it is worthwhile to figure out what caused the increase in demand.
(3) Part of it is the use of 401(k) and related investment vehicles which in some cases include the features of employer matches (free money to invest) and tax deferrals (free money now, pay many years later).
(4) Another part of it is the use of technology to create very low fee investing with on-line companies like Vanguard. Transaction costs for investing are much lower than they used to be with almost all on-line services. In the old days you had to call your broker and he got paid a fat commission for each transaction.
(5) As more people got wealthy from the stock market the “conventional wisdom” gets strengthened: “Just put your money in the market and watch it grow”.
Imho this is a crazy bubble, trouble trouble trouble—stay away.
The market seems to have it’s own reality.