The same low-interest-rate famine that is turning retirees into fearful serfs has made stock investors richer.
It doesn’t seem quite right, but that’s the way it is.
When common stocks have no competition, they go up in value. That, more than expectations of a glorious, strife-free future, is what has caused the most amazing stock market recovery in my half-century of investing experience.
You can understand this by doing a little time travel with me. We’ll revisit the 1970s and early 1980s. Back then, stocks had some real competition. You had to choose between the earning power of stocks and the earning power of bonds or money market funds.