Just an idea I had after reading this article on the "Sign-of-the-Bear-Signal":
Message 14401033
My perspective is too short to be able to decide on this, but there might be someting that has fundamentally changed on bull and bear markets in the past 80 years. When I started investing some 10 years or so, buying stock had something to do with entrepreneurship. The ones who did, did tried to guess on the success of enterprises, the economy, some technology... they tried to guess.
But this seems to be different today. I know so many people today who buy mutual funds, stocks they simply like and who do not even try to guess or take interest in the actual outlook of a given investment. This behaviour wasn't usual 10 years ago. Stock markets have become a replacement for the savings account. If I tell these people I am concerned on the markets they say "oh, stocks go up and go down".
The point I try to make is: These poeple do not try to evaluate someting. They have a strong belief that on the long run they have a good strategy to build savings, nothing more (I think they are right). And as a matter of fact, they don't panic. They produce a steady inflow of cash in the markets. I don't know, how significant this amount of money is but it is very reliable.
Can we have real bear markets any more? Maybe we can, but first we have to put these people out of the position to make savings by investing in stock. If this is correct, we need a happening recession first before we can have a real bear market...
PMG |
