> many people and experts are confused as to why the market is doing so well <
I’m not an expert. But I am a people. And I’m not confused at all.
I believe the market is doing well for one simple reason: interest rates are low.
Risk-adverse people used to invest in bonds that payed maybe 8% on average. And very risk-adverse people used to invest in CD’s that payed maybe 5%.
But those options are gone. A quality bond might pay 1 or 2%. And a CD way less than that. So the stock market is now not just one option for investors - it is the only option.
So absent a significant black swan event, I expect the market to do okay until interest rates rise again. And that ain’t happening any time soon.
Disclaimer: Warren Buffett has refused to put me on his board of directors. So what do I know?
“And very risk-adverse people used to invest in CD’s that payed maybe 5%.”
Our agency sold annuities years ago. I still have clients with old fixed annuities paying minimum guarantees of 6% and several with 8%. These were taken out in the mid 1980’s. At the time they were paying 12-14% with a either a 6 or 8% guarantee.
The clients who have them never take any money out of them unless they have to.
The good old days.